PayPal Participates in $300 Million Financing of Blockchain Startup Paxos, Valued at $2.4 Billion

By Luigi Wewege Thursday, April 29, 2021

Blockchain infrastructure startup Paxos announced it raised $300 million in Series D, one of the biggest-ever financing rounds for a startup focused on cryptocurrency and blockchain technologies.

Digital concept of blockchain.

Improve Infrastructure and Hiring More Staff to Fuel Growth

The latest business financing round was led by Oak HC/FT, along with participation from existing investors including PayPal Ventures, Declaration Partners, and Liberty City Ventures, among others. The startup company provides cryptocurrency offerings for businesses, as well as cryptocurrency trading and settlement solutions for securities and commodities.

The fresh funding takes the business valuation of the startup company to $2.4 billion and brings its total funding raised to over $500 million. The Series D came shortly after the blockchain business closed its Series C funding round in December 2020, when the blockchain business secured $142 million.

"Demand for our enterprise solutions has accelerated much faster than we could have anticipated. It validates our approach to providing the most innovative and regulated enterprise solutions to replatform the financial system and create the digital economy of the future,” Charles Cascarilla, co-founder and CEO of the blockchain business, says.

Paxos said it plans to use the proceeds to expand its regulatory compliance infrastructure, hire more employees, scale operations, and make acquisitions. Cascarilla said the startup company also plans to onboard three to five new clients that are similar in size to PayPal.

“Paxos will continue investing in the development of enterprise-grade infrastructure while deepening its commitment to regulation, reliability and security. The company will accelerate growth by hiring new team members across all functions, scaling its operations, increasing platform capacity and investing in innovation,” the CEO added.

Paxos developed a technology that powers cryptocurrency features of PayPal and Venmo, which are used by millions of users to buy, sell and hold cryptocurrency assets. In addition to its core business, the startup company has other offerings, including a dollar-backed stablecoin Paxos Standard (PAX), cryptocurrency exchange itBit, and an equities settlement product used by Credit Suisse and Societe Generale, among others.

The startup company is looking to become the first custodian of cryptocurrency assets that obtains regulatory approval at both the state and federal levels. The OCC said it will also allow Paxos to hold capital directly with the US central bank, and hence “hold and move customers’ cash more efficiently,” says Cascarilla.

To date, only two other cryptocurrency firms have obtained the national trust bank license, including Anchorage and Protego.

The blockchain company also plans to apply for a clearing agency license with the US Securities and Exchange Commission (SEC) after a successful pilot test in which Credit Suisse and Instinet used its settlement solutions, powered by blockchain technology, to perform trades on the same day settlement cycle.

Around the globe, trillions of dollars are locked in obsolete financial plumbing that cannot be accessed by millions of people. Paxos’s solutions allow transferring of those financial assets instantly, anywhere in the world.

Summary

Blockchain and cryptocurrency startup company Paxos raised $300 million in a Series D round led by Oak HC/FT, taking its business valuation to $2.4 billion. The payment-processing giant PayPal also took part in the financing round.

About the Author


Headshot for author Luigi Wewege

Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.

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