Babel Finance, a Hong Kong-based crypto startup that provides lending and trading services to institutional investors, has raised $80 million in a Series B funding round that values the company at $2 billion.
Investors in the round included Hong Kong-based tech investor Jeneration Capital, Dan Tapiero's 10T Holdings, Dragonfly Capital, BAI Capital, Circle Ventures and several unnamed family offices in the Asia Pacific region, the company announced on Wednesday. There was no lead investor in the round, a Babel Finance spokesperson told The Block.
With fresh capital in hand, Babel Finance plans to expand globally, especially in the UK, Latin America and North America, Yulong Liu, partner at Babel Finance, told The Block in an interview. To that end, the firm is also looking to scale its current team of 170 people to around 200, said Liu.
"We will take a rather cautious approach to hire more people" given the current somber mood in crypto markets, said Liu, after the firm expanded its team aggressively in the last year from 50 people.
Founded in 2018, Babel Finance provides services to both crypto-native and traditional financial institutions. It specializes in crypto lending and derivatives trading services, including futures and options.
The firm claims to have about 500 clients. At the end of 2021, Babel says it had an outstanding loan balance of more than $3 billion and an average monthly trading volume of $800 million in derivatives.
Liu said Babel's clients split about 50/50 across crypto and traditional finance — but more volume comes from the crypto-native firms. Clients are located globally, including in Asia, Australia, Africa and Latin America, but Asia accounts for more than 50% of the firm's business, he added.
Babel says it limits its business to bitcoin, ether and select stablecoins. Liu said those stablecoins include USD Coin, tether and Paxos's pax dollar. He said the firm didn't offer its clients any exposure to TerraUSD, Terra's algorithmic stablecoin that collapsed earlier this month.
The Series B round brings Babel's total funding to date to over $120 million. In May Last year, the firm raised $40 million in Series A funding. While Babel declined to disclose its valuation following the Series A, Dealroom estimates it was worth up to $240 million.
Liu declined to comment on the firm's valuation then and any new board seats allocated with the latest round.
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