BlockFi raises round down to $1 billion valuation: sources

Crypto financial services firm BlockFi is closing a down round – in which funds will be raised at a lower valuation than previous raises – according to three sources with knowledge of the process.

BlockFi, which reportedly raised funds at a valuation above $5 billion last year, provides a signal that the valuation squeeze that has hit the public token and equity markets is heading into private markets.

The company, founded in 2017 by Zac Prince and Flori Marquez to provide a way to borrow against their crypto holdings, announced a $350 million raise to a $3 billion valuation in March 2021. At the time, the company was touting sky-high growth metrics, like a $10 billion loan portfolio and 265,000 retail accounts.

Sources say the new round will be led by venture capital firm Bain Capital Ventures with participation from DST and Valar.

“BlockFi does not comment on market rumors,” a spokeswoman said, responding to a request for comment.

BlockFi’s decline represents a striking development in the crypto services industry given the high degree of venture capital activity a few months prior.

Over the past year, the market has seen a wide range of companies achieve valuations above $1 billion, including exchanges like Gemini and data providers like Dune Analytics. Venture capital firms deployed $28.94 billion in 2021, according to data compiled by The Block Research.

“Private valuations are adjusting,” one market participant said of the current environment for private crypto companies.

The round also comes months after BlockFi settled with the Securities and Exchange Commission (SEC) as well as state regulators in the United States regarding its crypto savings product. BlockFi previously told The Block that it plans to offer its more than 600,000 users a similar product after obtaining the required regulatory approvals.

© 2022 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.

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