Paxos, a blockchain startup based in New York, revealed on Thursday that it has raised $300 million in Series D funding from four high-profile investors.
Bank of America is the most well-known of these. Although the United States’ second-largest bank is not a prominent player in the blockchain arena, it demonstrated its growing interest in the technology in May when it used Paxos’ rails to settle some stock deals.
Coinbase Ventures is another one of Paxos’ “strategic investors” in its Series D financing. Coinbase’s venture capital arm has grown omnipresent in the crypto investing world, giving the US crypto behemoth holdings in startups that might generate huge profits in the future, as well as control over some organizations that could become competitors.
FTX and Founders Found are the other two investors who have joined the Series D round.
Sam Bankman-Fried, a 29-year-old billionaire who has virtually overnight become one of the most prominent personalities in crypto, runs FTX, a crypto derivatives market. From pricey sports marketing deals to buy out one of its biggest early investors to claiming carbon neutrality, his exchange is now constantly in the news. Founders Fund is Peter Thiel’s venture capital business, which has invested in SpaceX and Palantir, backed the litigation that brought Gawker down in 2016, and is now financing an upstart crypto exchange named Bullish.
FTX and Founders Fund’s joint investment demonstrates how money may transcend politics in crypto: Thiel is a devout conservative who addressed at former President Donald Trump’s inauguration, while Bankman-Fried was a major donor to Vice President Joe Biden.
Paxos, on the other hand, is not as well-known as many companies in the crypto business because it is not a consumer-facing company; instead, it concentrates on the back-end infrastructure. Paxos CEO Charles Cascarilla has stated repeatedly that he wants to use blockchain to remake Wall Street’s financial infrastructure, claiming that this will reduce delays, free up capital, and prevent meltdowns like those experienced by Robinhood and others when clearinghouses couldn’t keep up with record trading volumes.
The presence of these four high-profile investors boosts the possibility of Paxos being a takeover target.
Paxos now provides crypto services to PayPal and wants to do so for three to five other companies of similar size in the future, while also expanding its blockchain offerings to new institutions, including Credit Suisse. These ties, together with Paxos’ stablecoin business and compliance focus, might make it an appealing acquisition for PayPal, FTX, or Coinbase, though Cascarilla has previously stated that he intends to take Paxos public on its own.
Paxos has raised more than $500 million in total funding, with its Series D round valuing the company at $2.4 billion, which is a high price even for Coinbase or FTX. Previous investors Declaration Partners, PayPal Ventures, Mithril Capital, Senator Investment Group, Liberty City Ventures, WestCap, and others participated in the Series D round, which was led by Oak HC/FT.