As per the blog post announced by the company, Chainalysis, the firm has secured $30 million in a Series B funding round led by Accel which is a venture capital giant along with participation from the existing investors.
Chainalysis is a blockchain intelligence firm and a major provider of cryptocurrency compliance and investigation solutions and is based in New York.
In the post, the company stated that “One of our company values is “radical gradualism.” It reflects the combination of our big ambitions— to build foundational technology for the reinvention of the world’s financial system— with our insistence on debating every important decision along the way. We are thoughtfully and deliberately paving the way for the responsible use of cryptocurrency among governments, financial institutions, cryptocurrency businesses, and consumers. This is no small task. That is why we are excited to announce that to further our mission of building trust in blockchains, we’ve raised a $30M Series B led by Accel, with participation from existing investors.”
As per the report, the new funding would be utilized to support strategic product development of new cryptocurrency usage and open an office in London that would act as a center for its research and development lab and local extension. Most of the Accel’s investment was led by Amit Kumar and Philippe Botteri. Botteri would be representing Accel on Chainalysis’s board of directors.
The funding would further also be used to extend the corporate operations related to Chainalysis firm, that include the proprietary Know Your Customer (KYC) product which enables all the financial institutions and digital asset trading platforms to examine and check the identity of their clients efficiently.
Michael Gronager, CEO and Co-founder of Chainalysis, stated that “While other companies in our industry are pulling back, Chainalysis is investing in building foundational technology for the future of cryptocurrency. We are focused on empowering new cryptocurrency use cases like stablecoins and supporting businesses and governments globally as cryptocurrency regulation becomes more defined.”
Botteri, a partner at Accel and based in London, has stated his opinion with respect to such collaboration and said that “Thanks to its deep crypto expertise and unique technology, Chainalysis has quickly become the industry benchmark for blockchain analysis and compliance technology.”
Amit Kumar, a partner at Accel and based in Palo Alto giving his views stated that ”Chainalysis’s vision is to make cryptocurrency compliance a new standard for financial services as the ecosystem matures. We look forward to supporting them across Europe, the U.S., and Asia.”
Michael Gronager also revealed that earlier almost 90 percent of the firm’s revenue was being generated from their clients pertaining to law enforcement sector who had deployed the Chainalysis’ blockchain analytics tools to monitor illicit use of cryptocurrencies and currently the corporate clients possess 60 percent of the lion’s share business.
In the post, the company further stated that “This is just the beginning. Illicit activity will continue to increase in absolute terms as the industry grows and as institutions prepare to transact in cryptocurrency. We will use our new funding to grow our global footprint, double down on our data, invest even more in new cryptocurrencies and multi-currency support, and continue to improve our compliance and investigation software. There is significant work to do in preparation for regulatory clarity and the institutionalization and mainstream adoption of cryptocurrency.”
Talking about its expansion plans and its new investors, the post stated that “Although we’ve had feet on the ground in London for a while, we are excited to officially open an office there. As our second European office following Copenhagen, London will act as our hub for European business as well as anchoring our research. We will look to double our headcount there, tapping into London’s deep talent pool. The city is optimal for its proximity to top universities that increasingly recognize cryptocurrency as a technology poised to reshape the way people exchange value across the world. The office will position us to work with the major financial institutions and cryptocurrency businesses based in that market, as well as European governments. It’s also convenient that our newest board member, Accel’s Philippe Botteri, is based in London! “
It further added that “Additionally, we expect to continue to grow our business in APAC. In particular, cryptocurrency businesses founded in the region are quickly adopting anti-money laundering (AML) technology like ours in order to compete in the global arena and engage with users in the U.S. and Europe, and we expect this trend to continue. Cryptocurrency is borderless by design, and our technology can be used seamlessly across the world, regardless of local or international regulations.”
Apart from expanding on research and products, Gronager, in an interview with the Business magazine, Fortune, stated that Chainalysis was gaining from the strength of the growing stablecoin sector.
He further stated that “Born out of the ashes of [the crypto bear market and Initial Coin Offering downturn] was the stablecoin as another way to easily and safely create tokens. This ability to trade U.S. dollars against crypto is very powerful.”
Although Gronager did not share the revenue data but stated that Chainalysis’ revenue had risen by three times from last April, during which the company had obtained around $16 million from Benchmark Capital to enhance the number of cryptocurrencies that the company tracks. However, he also revealed that the company is still yet to become a profitable one.
Further, Chainalysis also executes the research process within the blockchain sector. During the last month, the firm had published a report in which they claimed that two hacker groups which are still active in the blockchain had stolen around $1 billion in cryptocurrency that accounts for the maximum of funds lost in crypto-related scams.
Sarah Tavel, General Partner at Benchmark and member of Chainalysis’s Board of Directors stated that “Chainalysis has seen significant traction over the past year, and we believe there is a steep growth trajectory ahead. We are doubling down on our conviction that the firm’s technology will build trust in the ecosystem and encourage greater participation in cryptocurrency markets.”