Babel Finance, a Hong Kong-based crypto financial services provider, has secured $80 million in a Series B funding round at a valuation of $2 billion, the firm announced on Wednesday.
The main investors in the Series B round include Asia-based growth capital investment firm Jeneration Capital and digital asset-focused growth equity fund 10T Holdings, as well as existing shareholders Dragonfly Capital and BAI Capital. Circle Ventures and a number of family offices in the Asia-Pacific region participated in the deal.
Founded in 2018, Babel is primarily involved in crypto lending and trading for a select group of institutional clients including crypto-native institutions, traditional financial institutions such as banks and investment funds, as well as ultra-high-net-worth accredited investors and family offices.
Its focus on institutional clients makes it unique compared with other crypto financial services platforms such as Matrixport, which is led by Bitmain Technologies’ founder Wu Jihan. Matrixport, which serves both institutional and retail clients, reached a unicorn valuation of over $1 billion in October 2021 after raising $100 million in a Series C round.
“Babel Finance is in the right place at the right time with the right products, serving the groundswell of demand from institutional investors and family offices for sophisticated digital asset products and services,” said William Zhao, partner of BAI Capital, in a statement.
Babel Finance , which limits its business to BTC, ETH, and stablecoins, booked an outstanding loan balance of over $3 billion and an average monthly trading volume of $800 million in derivatives at the end of 2021. Up to the time, it claimed to have structured and traded more than $20 billion in options products.
Babel has expanded its team to over 170 people from just 50 since the completion of its Series A round last May.
In the previous round, the startup raised $40 million from investors such as Sequoia Capital China and Dragonfly Capital. Its Series A round also marked the first investment in Asia’s crypto finance industry by US investment firm Tiger Global Management, European investor BAI Capital, and Zoo Capital, the venture arm of China-focused private equity (PE) firm Boyu Capital.
The earlier funding helped Babel open a new office in Singapore and speed up its applications for relevant licences in Hong Kong, Luxembourg, the UK, as well as other countries and regions worldwide.
“The crypto financial market is full of opportunities and hidden risks. From the perspective of short-term profits, the retail market and Altcoins [which refer to cryptocurrencies other than Bitcoin] may have higher profit margins, but we pay more attention to the long-term development of the industry and aim to lead in institutional financial services and innovation,” said Del Wang, co-founder and CEO of Babel Finance.
“This not only helps to overcome the many uncertainties in the early stage of the industry, including regulatory and market uncertainties, it also protects our customers to the greatest extent,” said Wang.
Another Singapore-based digital asset platform Amber Group, whose investors include Temasek, Sequoia Capital China, and Tiger Global Management, was valued at $3 billion after the completion of a $200-million Series B+ round in February.