Austin-based bitcoin financial services firm Unchained Capital lands $60 million to expand
Despite ongoing turbulence in the cryptocurrency market, Austin-based Unchained Capital has landed $60 million for expansion.
Founded in 2016, the bitcoin financial services firm develops technology for individuals and businesses that store long-term wealth in bitcoin and require private key ownership.
Bitcoin is a digital currency — or cryptocurrency — that is not backed by any government or central bank. Users can exchange it among themselves without the involvement of traditional intermediaries such as banks and governments.
Unchained has said its bitcoin native ecosystem ensures that users can secure and maximize the value of their bitcoin holdings over multiple generations. The firm currently secures more than $2 billion in bitcoin across thousands of keys, according to the company.
Unchained also offers bitcoin-collateralized loans and said it has originated $500 million of such loans since 2017. Other services include a trading desk, where clients can directly buy bitcoin.
The Series B funding round was led by Chicago-based Valor Equity Partners, with participation from existing investors NYDIG, Trammell Venture Partners, Ecliptic Capital, and Highland Capital Partners. Unchained has raised a total of $115 million since its launch.
The new cash infusion will be used to add more clients and expand product development and marketing.
Unchained, which is headquartered in downtown Austin in the Littlefield Building at 601 Congress Ave., has 85 employees and plans to increase its head count 5% per quarter through the end of the year, a company spokesperson said.
How is the bitcoin market performing?
The bitcoin market has been a roller coaster ride. Just months ago, all forms of cryptocurrency appeared to be going down in flames, with bitcoin plunging from almost $50,000 at the start of 2022 to less than $17,000 in early 2023.
Unchained wasn’t immune and cut its workforce by 15%, or 16 employees, in mid-November, according to bitcoin trade publications.
By March, bitcoin had soared more than 60%, but its course forward remains uncertain. Bitcoin slid toward $29,000 Wednesday as traders mulled the likelihood that Federal Reserve rate cuts might be farther out than they thought.
Vivek Pattipati, a partner at Valor who will be joining Unchained’s board of directors, acknowledged the challenges but said Unchained is positioned to be a market leader.
"In the midst of market chaos, Unchained has emerged as a highly trusted provider of bitcoin custody and financial services through superior technology, risk management, regulatory compliance, and client service,” he said. “Particularly in lending, the company has differentiated itself by minimizing risk to both the lender and the borrower, leading to resilience and an extraordinary opportunity to capture market share."
More: Austin's job market is confusing. Here's what to know.
What's ahead for Austin venture capital and the job market?
Venture capital investment matters to the Central Texas economy because it allows businesses — both startups and later-stage companies — to create jobs.
But with economic uncertainty looming, the level of investment dollars flowing into Austin in 2023 remains to be seen. Last year, despite an overall slowdown in U.S. venture capital funding, Austin startups fared well, scoring the second-highest amount in local history.
Austin-based early stage companies raised $5 billion in funding in 2022, which is down slightly from the record-setting $5.4 billion that startups received in 2021, according to a report by the Austin Chamber of Commerce and Opportunity Austin.
More: Will dollars keep pouring in for Austin startups in 2023? Here's what experts say
Other Austin deals this year include a $24 million investment in Strangeworks, which designs quantum software tools for software developers, system managers, researchers, technical staffers and chief information officers.
Meanwhile, tech giants with large Austin presences — including Google, Facebook parent company Meta, Austin-based Tesla and Round Rock-based Dell Technologies — have all laid off thousands of employees since late last year.
Meta recently announced another major round of layoffs. The company has cut at least 220 Austin jobs, according to a WARN letter — short for Worker Adjustment and Retraining Notification Act.
Facebook said late last year that it would not use an office space it had long anticipated expanding into in downtown Austin. Facebook had signed a lease to occupy all 589,000 square feet of office space in the mixed-use tower called Sixth and Guadalupe, but it now is subleasing the space.
Last month, Austin-based job site Indeed.com said it will lay off 2,200 employees, or roughly 15% of its global team, citing a cooldown in the overall job market and demand for its technology.
More: See which companies announced layoffs and closings
The company, which is one of Austin's biggest technology employers, announced the cuts in a blog post of an email sent to employees by Indeed CEO Chris Hyams on Wednesday. Hyams said the cuts come across the company, from nearly every team, function, level and region. He said Indeed also will institute other cost-saving measures.
Additional material from The Associated Press.
This article originally appeared on Austin American-Statesman: Austin-based bitcoin firm Unchained Capital has scored $60M to expand
