A startup aiming to be the go-to bank for rich bitcoin investors has scored $5.7 million in a fundraising round, the company announced Wednesday.
Founded in 2019, River Financial offers investors a place to buy, sell and store bitcoin, but unlike most retail-aimed exchanges and brokers in the nascent market, the San Francisco company is carving out its own niche by offering private banking services aimed at sophisticated and wealthy investors. The new offering, dubbed Private Client, offers such investors the ability to directly call a dedicated advisor at River Financial to address inquiries or issues with their account as well as other high-touch services.
In a sense, the firm's approach takes inspiration from private banks like First Republic Bank, which cater to wealthier folks, according to CEO Alex Leishman. Looking to the future, Leishman says all banking services — ranging from credit cards to high-yield accounts — are on the table and will be rolled out with the necessary banking partners.
As for the fundraise, the multi-million dollar round includes luminaries of the bitcoin market such as Square Crypto's Steve Lee.
Institutional investors in the round include Polychain Capital, Slow Ventures and Castle Island Ventures. Additionally, Lightning Labs CEO Elizabeth Stark serves as an advisor.
The fundraising round follows a period of growth for the 13-person company, according to Leishman. The firm offers a level of its services to less sophisticated investors as well. The former Polychain engineer said the company has been able to tap into a market underserved by the "Coinbases of the world," specifically older bitcoin investors who require more hand-holding and advanced services like tax-advantaged accounts and joint accounts.
The firm said in a press release it has seen its average monthly volumes increase by 80%. Since March, the company has seen much of its growth driven by investors over the age of 55, whom the company say are purchasing bitcoin to "hedge against potential inflation caused by the Fed's ongoing quantitative easing."