Jacquelyn Melinek

<div id="highlights-block_61b918abc45c1" class="highlights">
 <ul>
 <li>KKR is also investing in Anchorage’s Next Generation Technology Growth Fund II, which will be its first direct equity investment in a digital asset company</li>
 <li>This raise is another indication that KKR is interested in diversifying its portfolio into digital assets, after it invested as a limited partner in ParaFi Capital’s flagship fund in September</li>
 </ul>
 
</div>



Anchorage Digital raised $350 million in a Series D funding round led by private equity firm KKR, according to an announcement on Wednesday.&nbsp;



To date, the company has raised $487 million, Diogo Mónica, president and co-founder of Anchorage, said to Blockworks in an interview.



Other investors in the round include <a href="https://cms.blockworks.co/goldman-sachs-defi-has-its-advantages-over-traditional-finance/" target="_blank" rel="noreferrer noopener">Goldman Sachs</a>, Alameda Research, Andreessen Horowitz (<a href="https://cms.blockworks.co/a16z-launches-400m-seed-fund-to-expand-into-new-technology/" target="_blank" rel="noreferrer noopener">a16z</a>), as well as funds and accounts managed by Blockchain Capital, GIC, GoldenTree Asset Management, Innovius Capital, Kraken, Lux Capital and others.



&#8220;It speaks volumes to the legitimacy of crypto and how far we’ve come as an industry,” Mónica said. “KKR is one of the top financial investment firms and they believe in what we do. Goldman is one of the largest investment banks in the world. Crypto is exciting to Wall Street, and the names attached to this round speak to that trust,” he added.&nbsp;



In mid-November, KKR was set to lead the investment round that would value the bank at $3 billion, but the amount raised was not disclosed at the time, Blockworks <a href="https://cms.blockworks.co/anchorage-series-d-raise-at-3b-valuation/" target="_blank" rel="noreferrer noopener">previously reported</a>.



The company confirmed that this capital raise values the company at over $3 billion but declined to share what the valuation was prior to the announcement.&nbsp;&nbsp;



“We see this [capital raise] not only as a boost to crypto adoption, but a way to change finance itself so payments are faster, more transparent and more affordable,” Mónica said.



Anchorage is a digital asset platform for investors that provides services from custody, trading and staking to governance and financing. It previously announced an $80 million Series C round led by GIC in February of this year.&nbsp;



KKR is a global investment firm with a market capitalization of <a href="https://www.bloomberg.com/quote/KKR:US" target="_blank" rel="noreferrer noopener">$63.37 billion</a>. It manages multiple alternative asset classes, including a private equity <a href="https://www.kkr.com/businesses/private-equity/kkr-portfolio" target="_blank" rel="noreferrer noopener">portfolio</a> composed of 221 companies that bring in over $244 billion in annual revenues. As of June 30, 2021, the firm has over $429 billion in assets under management, according to its website.



Anchorage plans to use the capital investment to improve its infrastructure solutions for global financial firms and financial technology innovators. Additionally, the funds will be used to simplify and expedite clients’ engagement with the Web3 economy, grow its client base and expand product offerings.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;It will take speed and capital to accomplish the mission we set out in 2017. We raised this round to provide the secure infrastructure needed for crypto to become an everyday part of our lives,” Mónica said. “Both the additional working capital and the access to advice we’ll receive from firms like KKR, Goldman, Apollo, BlackRock and Wellington will help us grow at the pace required to forge a new standard in finance.&#8221;</blockquote>



KKR is also investing in Anchorage’s Next Generation Technology Growth Fund II, which will be its first direct equity investment in a digital asset company. The fund will be dedicated to “growth equity investment opportunities in the technology space,&#8221; according to the company.



This investment is another indication that KKR is interested in diversifying its portfolio into digital assets.



In September, <a href="https://cms.blockworks.co/private-equity-firm-kkr-invests-in-defi-and-blockchain-focused-parafi-capital/" target="_blank" rel="noreferrer noopener">Blockworks reported that KKR has invested</a> as a limited partner in ParaFi Capital’s flagship fund. ParaFi manages about $1 billion and focuses on decentralized finance and blockchain technology. Recently, the <a href="https://cms.blockworks.co/parafi-to-launch-200-million-growth-fund/" target="_blank" rel="noreferrer noopener">company has been making moves</a> to launch a $200 million growth fund.



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a16z

Goldman Sachs, KKR, a16z Invest $350M in Anchorage Digital

Sam Reynolds

<div id="highlights-block_61964dccecf74" class="highlights">
 <ul>
 <li>Anchorage is a major player in digital asset custody, and now on the radar of major Wall Street firms</li>
 <li>KKR&#8217;s total assets under management reached $459 billion in Q3, 2021</li>
 </ul>
 
</div>



Private equity firm KKR &amp; Co is set to lead an investment round into digital asset bank <a href="https://cms.blockworks.co/?s=Anchorage" target="_blank" rel="noreferrer noopener">Anchorage</a>, which would value the bank at $3 billion, <a href="https://www.theinformation.com/articles/kkr-plans-to-lead-investment-in-crypto-firm-anchorage" target="_blank" rel="noreferrer noopener">The Information reports</a>.



This move by KKR continues the firm’s interest in digital assets. In September, <a href="https://cms.blockworks.co/private-equity-firm-kkr-invests-in-defi-and-blockchain-focused-parafi-capital/" target="_blank" rel="noreferrer noopener">Blockworks reported that KKR has invested</a> as a limited partner in ParaFi Capital’s flagship fund. ParaFi manages about $1 billion and focuses on decentralized finance and blockchain technology. Recently, the <a href="https://cms.blockworks.co/parafi-to-launch-200-million-growth-fund/" target="_blank" rel="noreferrer noopener">company has been making moves</a> to launch a $200 million growth fund. 



ParaFi’s founder Ben Forman was once KKR’s research head, and the firms are said to maintain close ties.&nbsp;



Anchorage has attracted significant institutional interest since its inception. Earlier this year Singapore’s GIC, one of its sovereign wealth funds that’s a low-risk, blue-chip investor, closed an $80 million round into the bank, <a href="https://cms.blockworks.co/gics-anchorage-investment-sheds-light-on-future-of-digital-assets/" target="_blank" rel="noreferrer noopener">Blockworks reported</a>. Within Asia, GIC is considered to be a very conservative investor looking for infrastructure plays, whereas its cousin, Singapore’s Temasek, is compared to Masayoshi Son’s Softbank preferring big bold bets.&nbsp;



The Information also reported that Fireblocks, a custodian, is in the process of raising a round with a valuation of $8 billion.&nbsp;&nbsp;&nbsp;



To date, Anchorage has raised $137 million over four funding rounds, according to <a href="https://www.crunchbase.com/organization/anchorage">Crunc</a><a href="https://www.crunchbase.com/organization/anchorage" target="_blank" rel="noreferrer noopener">h</a><a href="https://www.crunchbase.com/organization/anchorage">base Pro</a>.&nbsp;The regulated custody of digital assets remains a significant barrier to mainstream adoption. In the US, major baking regulators FDIC, Federal Reserve and Office of the Comptroller of the Currency have been <a href="https://www.reuters.com/business/finance/us-regulators-exploring-how-banks-could-hold-crypto-assets-fdic-chairman-2021-10-26/" target="_blank" rel="noreferrer noopener">exploring</a> how best to coordinate supervision of banks that want to provide custody services. Previously, the OCC took proactive steps to establish a “<a href="https://cms.blockworks.co/occ-to-unveil-bank-charter-for-crypto-financial-services-firms/" target="_blank" rel="noreferrer noopener">crypto bank charter</a>” with Anchorage and Paxos <a href="https://cms.blockworks.co/paxos-gets-occ-approval-for-a-bank-charter/" target="_blank" rel="noreferrer noopener">two prominent recipients</a> earlier this year. 



Anchorage PR representatives, reached by Blockworks, declined to comment.



This story was updated <meta charset="utf-8">on November 18, at 11:09 am ET.



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Anchorage

KKR Leads Anchorage Series D Raise at $3B valuation

<div id="highlights-block_615516705df87" class="highlights">
 <ul>
 <li>KKR joins a list of other LPs invested in ParaFi, including allocators across Silicon Valley, Wall Street, family offices, institutional fund of funds, venture funds, crypto founders and companies</li>
 <li>KKR is a global investment firm with a market capitalization of over $53 billion</li>
 </ul>
 
</div>



Private equity firm KKR &amp; Co. has invested as a limited partner in ParaFi Capital’s flagship fund, a source familiar with the matter told Blockworks.&nbsp;



KKR is a global investment firm with a market capitalization of over <a href="https://www.bloomberg.com/quote/KKR:US" target="_blank" rel="noreferrer noopener">$53 billion</a>. It manages multiple alternative asset classes, including a private equity <a href="https://www.kkr.com/businesses/private-equity/kkr-portfolio" target="_blank" rel="noreferrer noopener">portfolio composed</a> of 109 companies that bring in about $244 billion in annual revenues. As of June 30, 2021, the firm has over $429 billion in assets under management, according to its website.&nbsp;



The three-year-old ParaFi Capital manages about $1 billion and focuses on decentralized finance and blockchain technology. Its website states ParaFi Capital invests in digital assets that “address tangible use cases, demonstrate signs of product-market fit, and exhibit compelling cryptoeconomic models.”



KKR joins a list of other LPs invested in ParaFi Capital, including allocators across Silicon Valley, Wall Street, family offices, institutional fund of funds, venture funds, crypto founders and companies. ParaFi Capital’s investors also include venture capital firms Bain Capital Ventures and Galaxy Digital Ventures as strategic partners.



Ben Forman, the founder of ParaFi, has close ties to KKR, having spent time there leading research internally on blockchain before leaving to launch ParaFi in 2018, the source said to Blockworks, adding that the DeFi space is at an inflection point and there is growing adoption of blockchain technology and DeFi among institutional investors.



Both KKR and ParaFi Capital declined to comment when requested by Blockworks.&nbsp;



In 2019, it was <a href="https://www.bloomberg.com/news/articles/2019-06-28/kkr-s-kravis-invests-in-his-former-credit-analyst-s-crypto-fund" target="_blank" rel="noreferrer noopener">reported</a> that Henry Kravis, co-founder of KKR, invested in the flagship fund for ParaFi Capital. However, a spokesperson for Kravis declined Bloomberg’s requests to comment at the time.&nbsp;



In general, the crypto space has seen a huge influx of funding from traditional venture capital and private equity firms looking to dive into the digital asset world. In the first quarter of 2021, over $3 billion was allocated into crypto investments up 150% from $1.2 billion in the previous quarter, according to <a href="https://pitchbook.com/news/articles/crypto-startups-post-record-quarter-as-opportunities-abound" target="_blank" rel="noreferrer noopener">data</a> from Pitchbook.



With that said, KKR joins a list of other investors and venture capital firms, like Andreessen Horowitz (a16z)&nbsp; which created a <a href="https://cms.blockworks.co/andreessen-horowitz-launches-2-2b-crypto-fund/" target="_blank" rel="noreferrer noopener">$2.2 billion crypto fund</a> back in June, that have heavily invested in crypto-related companies this year.

KKR

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