Crypto lender Babel Finance secures $40 million Series A - Android

Cryptocurrency financial service provider Babel Finance looks to lure investors from traditional finance to the digital assets world.

Cryptocurrency financial service provider Babel Finance has raised $40 million in its Series A led by heavyweights within its own industry and beyond.

Why it matters: Babel has been trying to attract investors from the traditional finance world to invest in digital assets. The backing of fiat currency-based venture capital and private equity funds could boost its appeal to traditional investors.

The company: Founded in 2018, Babel’s investment prior to its Series A was $2 million, according to Crunchbase. The company has serviced 500 institutional clients, and the outstanding balance of its cryptocurrency-lending business was $2 billion as of February, according to a statement sent to TechNode.

• Babel started out providing lending services to cryptocurrency miners, but now aims to cash in on increased interest in the digital assets from deep-pocketed traditional finance players.
• The company has applied for one of the coveted asset management licenses in Hong Kong, which would allow it to provide investment services in the city.

“The alliance with our new investors from traditional finance is a critical step for us to offer more innovative products, strengthen compliance controls, and ultimately provide a full suite of reliable services to meet the growing demand from mainstream investors who are keen to allocate crypto assets in their portfolio.”

—Flex Yang, CEO of Babel Finance, in the statement

The investors: Babel’s Series A was led by Sequoia Capital China, Dragonfly Capital, Zoo Capital, Bertelsmann Asian Investments (BAI), and Tiger Global Management.

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• Sequoia China has been active since 2018 in Chinese cryptocurrency startups, and is a strategic partner to Dragonfly, one of China’s most well-known crypto investors.
• It was a first investment in Asia’s crypto industries for Zoo Capital, BAI—the Asian VC of media and education giant Bertelsmann—and New York-based Tiger Global Management.
• Zoo Capital is the early-stage arm of Boyu Capital, a late-stage VC that has invested in Alibaba, Kuaishou, Pinduoduo, and Ant Group.
• BAI’s China portfolio includes fintech firm Lexin, grocery e-commerce firm Dingdong Maicai, and LGBTQ dating app Blued, and bike rental company Mobike.