BlockFi is raising a Series D funding round at $2.85 billion pre-money valuation: sources

Crypto lending startup BlockFi is in the process of closing a Series D fundraising round at a pre-money valuation of $2.85 billion, according to two sources familiar with the deal. 

With backing from Bain Capital Ventures, the latest round follows a Series C raise in August, which at the time valued BlockFi at approximately $400 million, as sources noted at the time. BlockFi is raising $150 million of primary investment "and up to $200 million pursuant to the tender offer" for an aggregate of $350 million, according to one source. After the publication of this story, a source told The Block that Tiger, Paradigm, and DST are also taking part. Crypto influencer and investor Anthony Pompliano also participated.

Sources say that the fresh injection of cash will leave BlockFi poised for a public market debut — likely through a special purpose vehicle — by the end of 2021.

Blockworks previously reported on the funding efforts, but both the valuation and target raise amount were unknown at the time. A spokesperson for BlockFi declined to comment. 

The Block Research recently charted out BlockFi's funding efforts and product lines alongside some of its industry peers:

BlockFi has been growing quickly. The startup's monthly revenues from institutional and retail lending increased from $44,900 in January 2019 to more than $3 million in May 2020. 

BlockFi got its start in crypto lending when the startup launched in 2018, and it has since expanded into a wide range of institutional and retail services.

More recently, BlockFi announced the launch of a Bitcoin Trust product in a bid to compete with industry giant Grayscale. The vehicle offers a way for institutions and accredited investors to gain exposure to bitcoin without actually owning the digital asset. As noted by The Block Research's Ryan Todd, BlockFi has over $8 billion in total client balances, representing a more than 30x increase relative to  4Q’19.

The company generated nearly $100 million worth of revenue in 2020 at nearly 30% gross profit margins. 

The Jersey City-based lender also plans to launch a credit card product, an initiative led by Andrew Tam, an alum of Credit Karma. Tam stepped into the position after Wittney Rachlin left the firm to join Yield Street as its chief marketing officer. 

This story has been updated with additional information about the funding round's participants.