Elwood Technologies gains $70m in Series A

Investment signals financial institutions’ growing interest in the cryptocurrency space

by | May 16, 2022 | bobsguide

UK crypto trading platform Elwood Technologies has raised $70 million in Series A funding round from a consortium of investors co-led by Goldman Sachs and B2B investor Dawn Capital.

Investors Barclays, BlockFi Ventures, Chimera ventures, CommerzVentures, Digital Currency Group, Flow Traders and Galaxy Digital Ventures also participated in the capital raise.

Elwood intends to use the funding to expand its product offerings and global operations.

“We have entered a new chapter in Elwood’s journey and continue to expand our capabilities, enabling our institutional clients to provide their users with improved access to digital assets,” said CEO, James Stickland.

The funding round close coincides with institutional investors’ rising interest in digital assets, providing Elwood Technologies with a growing market to capture.

“The rich mix of investors participating in this raise reaffirms the movement of financial institutions working closely with their native digital asset technology providers,” said Stickland.

To leverage the accelerating trend, Elwood, in February, partnered with Bloomberg to provide its digital assets capabilities to users of its asset and investment management suite (AIM).

Institutional money brings in finance heavyweights

Elwood’s drive to collaborate with traditional finance market players signals the growing appetite and active involvement from financial institutions in the cryptocurrency market as clients look to capitalise on the potential high returns available on cryptocurrencies.

According to cryptocurrency exchange Gemini, venture capital investment exceeded $30 billion in crypto and blockchain startups last year.

Also in 2021, trading volume from institutional clients reportedly also reached $1.14 trillion on Coinbase, more than double the $535 billion retail volume.

Coinbase’s latest quarterly report also highlighted the lively nature of institutional investors in the crypto space, with the exchange recording $235 billion of trading volume in the first three months of 2022. In contrast, retail trading volume was mere $74 billion.

Mathew McDermott, global head of digital assets at Goldman Sachs, said, “As institutional demand for cryptocurrency rises, we have been actively broadening our market presence and capabilities to cater for client demand.”

The financial giant’s latest investment builds upon its ongoing ventures into the crypto market, which last year included the establishment of a crypto trading desk.

In March this year, the bank executed its first over-the-counter crypto options trade, with a non-deliverable Bitcoin option. It is also reportedly planning to offer OTC Ether options to its clients.

Late last week, Japanese bank Nomura also began offering bitcoin over-the-counter derivatives to clients. The move was swiftly followed by news that the bank is preparing to launch a crypto subsidiary by 2023.

Sustained interest in crypto drives boom in trading software

Elwood’s announcement of a successful funding close comes amid the ongoing meltdown in the cryptocurrency market, which saw stable coin TerraUSD crash below its $1 peg, dragging down the value of other cryptocurrencies.

Despite the cryptocurrency market collapse, institutional investors remain positive on the upturn in the future and took advantage of the cheap offerings, once again highlighting the long-term need for agile, data-driven trading software suited to large trading volumes.

According to Coinshares, digital asset investment products saw weekly inflows of $274 million last week, highest weekly inflows in the year so far.

The continued interest has also sustained the ongoing investments of investors into digital assets providers and related technology.

Last week, Talos, a digital asset trading technology, raised $105 million in Series B funding round led by growth equity firm General Atlantic, which also included Stripes, BNY Mellon, Citi, among others.

The two funding rounds continue the investment trend in digital assets provider, which last month saw Unifimoney raise $10m in seed funding to expand its digital assets offerings, among others.