New York-based bitcoin firm NYDIG said Tuesday that it had raised $1 billion at a valuation of more than $7 billion, the latest in a series of blockbuster funding rounds this year by cryptocurrency startups.
Earlier known as New York Digital Investment Group, the firm runs a bitcoin trading, brokerage, custody and asset-management business that caters to institutional investors.
Participants in the investment round included Morgan Stanley, Massachusetts Mutual Life Insurance Co. and New York Life Insurance Co, NYDIG said in a news release. All three firms—stalwarts of traditional finance and insurance—were existing investors in NYDIG.
The round was led by WestCap Group, the growth-equity firm founded by technology investor Laurence Tosi, a former chief financial officer of Airbnb Inc. and Blackstone Group. WestCap became a new investor in NYDIG with the round, as did point-of-sale lender Affirm Holdings Inc. and financial-technology group Fiserv Inc. NYDIG, founded in 2017, hasn’t previously released its valuation.
Some of the most established Wall Street firms have announced cryptocurrency initiatives this year after previously keeping their distance from the digital assets. Bank of New York Mellon, the nation’s oldest bank, announced plans in February to hold, transfer and issue bitcoin for asset-management clients.
Investors have lavished money on crypto startups, betting on continued adoption of digital currencies despite their wild volatility and uncertain regulatory status. Bitcoin was trading at about $47,000 on Tuesday, down more than 30% from its record in November, but still more than double where it stood a year ago.
In November, Digital Currency Group Inc. raised $700 million in a funding round that valued the crypto conglomerate at $10 billion. Crypto exchange FTX Trading Ltd. raised $900 million in July and then closed an additional $420 million funding round in October that valued the firm at $25 billion.
In December 2020, NYDIG facilitated MassMutual’s purchase of $100 million in bitcoin, a deal that signaled growing mainstream acceptance of digital currencies and helped ignite a huge bull market in crypto during the following months. MassMutual took a minority stake in NYDIG as part of that transaction.
More recently, NYDIG has focused on selling technology to allow banks, credit unions and merchants to embed bitcoin services in their websites or smartphone apps. In November, the firm struck a deal with restaurant and hotel conglomerate Landry’s Inc. to allow customers to earn bitcoin-based loyalty points for dining at its restaurants. Landry’s brands include Morton’s The Steakhouse and the Bubba Gump Shrimp Co.
Write to Alexander Osipovich at alexander.osipovich@dowjones.com
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Appeared in the December 15, 2021, print edition as ‘Funding Round Brings in $1 Billion For Bitcoin Firm.’
