Stillmark targeting $500 million raise for new bitcoin credit fund

Alyse Killeen's Stillmark is trying to raise about $500 million for a new credit fund dedicated to lending capital to companies operating in the bitcoin market, according to sources familiar with the firm's plans. 

Launched in 2019, Stillmark is a venture capital firm focused on backing companies investing in bitcoin and Lightning Network infrastructure. The firm's portfolio companies include Satoshi Energy, Casa, and Lightning Labs. The firm's managing partner and founder previously held positions at venture capital firms including Clearstone Venture Partners and March Capital Partners. 

As for the new fund — dubbed the Stillmark Credit Fund — it will offer companies in the Bitcoin space with debt "as they grow their transaction and payment processing capabilities, [a] critical inflection point that requires 'liquidity,'" according to a deck reviewed by The Block. 

On Wall Street, credit funds lend out capital to companies in return for interest payments. For investors, they offer a less risky return than a traditional hedge fund or venture fund structure, while providing a way for startups to have access to capital without having to give up equity. 

"Informed by our venture work, Stillmark recognizes both an imminent inflection point for the ecosystem and an acute need for innovating companies," the deck said. 

"Lightning Network targets the $5 trillion payment market; SCF targets the needs of leading Lightning innovators," the deck said, referring to the Layer 2 platform built on Bitcoin that supports faster and cheaper bitcoin transactions.