A new Bitcoin unicorn is about to be born. After several days of rumors, the research company Chainalysis exclusively confirmed to Forbes that it is expected to raise US$100 million in venture capital as soon as next week, with a valuation of US$1 billion. The newly established venture capital firm Addition by Tiger Global’s Lee Fixel will lead the C round of financing. It is expected that previous investors Accel, Benchmark and Ribbit will also participate.
Although Chainalysis CEO and co-founder Michael Gronager refused to share the company’s actual revenue, according to Forbes estimates, the company’s revenue in 2018 was $8 million. Gronager said the company’s revenue has grown in the past year. That’s about 96%. Revenues are expected to double next year and 2022. This investment further proves that encryption technology is more profitable than buying low and selling high. In addition to helping the U.S. Department of Justice track down more than $1 billion worth of bitcoin and other cryptocurrencies seized earlier this month, Chainalysis currently has 350 customers, including state governments and private institutions.
Today, the price of Bitcoin has reached its highest level in the past three years. Chainalysis and its concept of obeying the rules are becoming a symbol, symbolizing the obstacles that investors must overcome when gaining exposure to alternative assets, as well as these investors. Opportunities faced. The 50-year-old Gronager said:
“We have proven that by providing data services in the cryptocurrency field, it is possible to establish a world-class B2B software service company and truly own the encrypted data part.”
At present, the company has offices in New York, Singapore and Tokyo, and plans to expand its business in Washington, DC and international markets, where the regulatory needs of the United States are high. In fact, this demand has reached a very large scale, so that during the company’s B round of investment in July this year, Sigal Mandelker, the former sanctions director of US President Trump, also joined Chainalysis’s advisory board.
But perhaps most importantly, the company said it has raised much more funds than it did in Series B because it hopes to have the opportunity to acquire another company. “We believe that the timing, the maturity of the market and the crypto space will form a force, and there may be some inorganic growth,” Gronager said.
Chainalysis has 250 customers from the private sector, including payment giant Square and other companies, and the remaining 100 customers from the public sector in 30 jurisdictions, including the US Internal Revenue Service. In the past year, Chainalysis’s total number of customers has increased by 65%. Although most of the start-ups that are growing at a rate of 40% or more are far from profitable, Gronager said that the current situation of start-ups burning money has basically not happened to Chainalysis, and the company will soon become profitable. Gronager said:
“Our company consumes very low costs and is very efficient. Therefore, we are almost profitable now.”
Just this week, Chainalysis released a report stating that 2020 is the year of institutional adoption of Bitcoin, and specifically mentioned the examples of hedge fund managers Paul Tudor Jones and Square. Earlier this week, the financial consulting firm DeVere Group stated that of its 700 millionaire customers surveyed by cryptocurrencies, 73% said they have invested or will invest in cryptocurrencies by 2023. This number has increased by 68% since last year. “As mainstream companies like Paypal begin to provide encryption services,” Accel partner and Chainalysis investor Philippe Botteri said in a statement. “We expect the popularity of cryptocurrencies to accelerate further.”
More and more security companies, such as the headquarters of Chainalysis, Elliptic, and the up-and-coming Clain, not only help find criminals after the incident, but also help prevent crime. In August 2019, Chainalysis launched KYT (Know Your Transaction) to simplify blockchain analysis, and launched Market Intel in July 2020 to analyze cryptocurrency transactions and more. In general, these two services undermine what Gronager calls “code compliance”, making it easier to prevent fraud, and perhaps also help lay the foundation for more institutions. He said that now, the way to expand in the compliance department is not to add 10 employees, but to add a developer.
