Why ConsenSys Ventures invested in a crypto-backed lending startup - Technical.ly Brooklyn

Business

Feb. 16, 2018 12:57 pm

Why ConsenSys Ventures invested in a crypto-backed lending startup

The finance of crypto takes a step forward with margin lenders BlockFi.

"We were drawn to BlockFi's compelling use case and the gap they are filling in the ecosystem," ConsenSys Ventures Founding Managing Partner Kavita Gupta explained.

(Photo by Flickr user Ethereum Classic, used under a Creative Commons license)

New York-based crypto startup BlockFi announced Thursday a $1.5 million seed round of funding, led by Brooklyn’s own ConsenSys Ventures.

The funding round indicates a further maturation of the cryptocurrency world, as BlockFi’s product is essentially margin lending backed by crypto assets.

“We were drawn to BlockFi’s compelling use case and the gap they are filling in the ecosystem,” ConsenSys Ventures Founding Managing Partner Kavita Gupta explained in an email. “Despite what you see sometimes in the news, crypto assets possess real, tangible value and should have the ability to be lent against like any other asset.”

In the same way that a brokerage would offer its clients margin loans backed by the stocks they own, BlockFi will offer loans collateralized by a person’s crypto holdings, charging a 12 percent interest rate on the loan.

“We see people who are overexposed to cryptocurrency (20%+ of their net worth) as the most obvious early users,” Gupta explained. “BlockFi allows these customers to continue holding their crypto while getting short-term fiat liquidity.”

BlockFi is lead by Zac Prince, who’s spent his career in sales and business development, and by Flori Marquez, whose background is in portfolio management.

BlockFi is ConsenSys Ventures’ fifth investment since its founding last year.

-30-
JOIN THE COMMUNITY, BECOME A MEMBER
Already a member? Sign in here

Advertisement

Could HEVO be Brooklyn’s next unicorn?

Brooklyn fintech startup aims to modernize payroll benefits

Esports at Barclays is a bigger ticket than Cardi B

SPONSORED

Brooklyn

You can win up to $360,000 at the WeWork Creator Awards

Philadelphia, PA

Orthly

Full-Stack Javascript Engineer

Apply Now
Baltimore, MD 21201

14 West

Senior Software Engineer (Java + Apache Spark)

Apply Now

Check out the 3 Brooklyn startups featured in WeWork’s new WeMRKT

Industrious teamed up with LL Bean for outdoor coworking in Madison Square Park

You can win up to $360,000 at the WeWork Creator Awards

SPONSORED

Brooklyn

Explore how diverse teams build dynamic products with Dev Bootcamp

Sign-up for daily news updates from Technical.ly Brooklyn

Do NOT follow this link or you will be banned from the site!