There has been a huge increase in fintech services in recent years, with fintech companies competing to develop new products faster than their competitors. Today, the race between fintechs has much more to do with consolidation and which companies can build a holistic, “one-stop-shop” by bringing those different products on one platform.
Start-up of crypto custody and fintech infrastructure first trust is positioning itself to do just that, and the company has just raised more than $100 million in new funding to add new products to its existing suite, CFO Rodrigo Vicuna told gotechbusiness.com. The latest round from the Las Vegas, Nevada-based company is a Series B with a mix of existing and new investors, including FIS, Fin Capital, Mercato Partners, Kraken Ventures, Commerce Ventures, William Blair & Company, Decasonic, University Growth Fund , Gaingels, GateCap Ventures and Seven Peaks Ventures, the company said.
Prime Trust previously raised $64 million from investors in the summer of last year, five years after it was founded. Since that last fundraiser, Vicuna said, Prime Trust has expanded its team in numerous areas, including R&D, product and engineering, sales and compliance, bringing its total workforce to 400 today.
The company serves about 700 clients, according to Vicuna, ranging from crypto exchanges, ramps, wallet apps, ATSs, RIAs, broker-dealers and banks. Prime Trust plans to use the new funds to launch a crypto-focused IRA retirement account, as well as wealth management and crypto-strike products, he added.
Prime Trust’s current offerings can be broken down into three main stacks, Vicuna explained — “onboarding,” which includes compliance and rails, “monetization,” which includes functions such as trading and custody, and “liquidity,” which he says includes IRAs and trading-related Products.
“Most people jump into the onboarding part first, because it’s necessary, right? You must comply with AML, KYC BSA and you must be able to provide rails in and out of your platform. I’d say this was the traditional point of the spear for the company, and now a lot of people are saying, hey, cool, those are table stakes, we want this other stuff,” Rodrigo said.
In addition to launching new products, the company also plans to improve its support for tokenized products such as NFTs and invest in security and scalability improvements, including a new cloud architecture, he added.
“Having support for that whole spectrum from non-fungibility to fungibility is a very important part of what we do as a back-end provider for the total space and being able to support the broader use cases [of blockchain] going beyond just one asset class,” said Vicuna.
The crypto infrastructure space is relatively crowded, with startups of all stages like Blockdaemon and Cryptio vying for share. According to Vicuna, Prime Trust stands out because its product offering is “much broader,” a benefit to the company’s institutional customers, who can choose which aspects of the platform they want to leverage.
While it has been a tough fundraising environment for crypto startups in recent months, Vicuna said Prime Trust’s latest round was oversubscribed. He said he sees investor interest as a reflection of the company’s status as a “picks-and-shovels” player that offers the kind of underlying technology that many fintech and crypto companies rely on to grow.
“We had the advantage both of planning early, but also of being in the right place at the right time,” said Vicuna.
“We are really taking a gamble on adoption. If I took a step back, do I think the macro market has had an impact on the investment world? It has, yes. Was it hard for us to raise? Not really… People were really excited about the back-end core infrastructure of the market. They want to take that gamble on adoption, and they believe that despite the volatility, it will be up and to the right.