iTrustCapital, a platform that allows users to buy cryptocurrencies through their individual retirement accounts (IRAs), has raised $125 million in a Series A funding round.
Left Lane Capital led the round. iTrustCapital capital did not disclose participating investors, but its senior vice president of investor relations, Kevin Maloney, told The Block that the firm had initially closed on $100 million from Left Lane Capital, but it had additional demand and ended up raising $25 million more from Left Lane and other investors.
As part of the deal, Left Lane principal Matthew Miller has also joined iTrustCapital's board of directors.
This is the first time iTrustCapital has raised VC funds. The firm was bootstrapped with $1.3 million in total seed capital secured from friends and family.
The Series A round brings the valuation of iTrustCapital — which only launched its platform in July 2019 — to over $1.3 billion.
Maloney said iTrustCapital has witnessed significant growth, increasing its revenue from $3 million in 2020 to more than $48 million in 2021.
The platform takes 1% transaction fees for letting people buy crypto from their self-directed IRAs. Investing through IRA platforms is different from crypto exchanges in several ways. The key difference is that IRAs provide tax-advantaged exposure to crypto. But, with IRAs, one cannot self-custody their crypto holdings because, per US IRA rules, assets must be custodied by IRA platforms.
iTrustCapital's custody partners are Coinbase Custody and Fireblocks.
Besides no self-custody, another major drawback of crypto investing through IRAs is that early withdrawals before the age of 59.5 may incur a penalty.
But iTrustCapital is seeing increased demand for its platform. Maloney said more than 120,000 new accounts have been created on the platform since its launch, with more than 25,000 active monthly users. The platform has thousands of working professionals in the 45 to 65 age range, while the average age of a crypto investor is typically between 21 and 35 years.
With fresh capital in hand, iTrustCapital plans to offer new products, such as staking of governance tokens, and explore acquisitions. "We are actively exploring opportunities to acquire high-quality senior-level talent and technologies that could help expand our footprint domestically and possibly, abroad," said Maloney.
iTrustCapital is also looking to expand its current headcount of 125 to over 250 people this year, said Maloney. To that end, the firm is also exploring raising a Series B round, likely in the $300 million-plus range, said Maloney.
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