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Germany-based Crypto Custodian Finoa Raises $15M at $100M Valuation

Finoa, a Germany-based crypto custodian and staking services provider catering primarily to institutional clients, has successfully raised $15 million in a strategic funding round. Maven 11 Capital and Balderton Capital co-led this investment with participation from other notable investors such as Blue Bay Ventures, Signature Ventures, Coparion, and Venture Stars.

Christopher May, the co-founder and co-CEO of Finoa, revealed that the equity round commenced in June of the previous year and concluded in December. Originally aiming for $5 to $6 million from existing investors, Finoa exceeded its target due to heightened interest from external investors, particularly as the firm recently achieved profitability.

This strategic funding round marks a significant milestone for Finoa, coming almost three years after the company secured $22 million in Series A funding in April 2021. In a departure from a larger Series B round, Finoa opted for a more focused strategic funding approach, aligning with its growth objectives.

The source familiar with the matter indicated that the funding round maintained a flat valuation of $100 million, echoing Finoa’s Series A valuation from 2021. The strategic investment is likely to fuel Finoa’s expansion and enhance its position in the institutional crypto services sector.

Finoa has surpassed its primary competitors, such as prominent firms like Fireblocks and Anchorage, by its unique advantage as a qualified custodian in Europe. Finoa holds licenses from the German Federal Financial Supervisory Authority, distinguishing it within the market.

Crypto Custodian Finoa’s Road to Profitability

Established in 2018, Finoa sustained profitability until 2021 but encountered losses in the subsequent two years amid challenging market conditions and cryptocurrency downturns, as noted by May. However, propelled by the recent market resurgence and the expansion of its staking business, Finoa returned to profitability in the fourth quarter of 2023.

Finoa’s staking division, Finoa Consensus Services, has amassed over 500 million euros (approximately $547 million) in assets since its launch in May 2022, constituting nearly 60% of the company’s total revenue. Supporting over ten blockchains for staking, Finoa is the third-largest validator for the modular blockchain Celestia, according to Nodes.Guru data. The flagship custody business contributes almost 30% to the revenue, while the remainder comes from brokerage and other services, according to May.

Recently, Finoa introduced a new service, FinoaConnect, enabling clients to access decentralized finance (DeFi) applications through its custodial wallet infrastructure. While currently in beta, the service is anticipated to generate additional revenue for the company once fully operational.

With approximately 50 employees at present, Finoa has no immediate plans for aggressive hiring, according to May. He mentioned that the company had to downsize its staff over the past two years due to market conditions, with the headcount exceeding 100 in 2021.

As part of the strategic funding round, Balder Bomans, managing partner at Maven 11, has joined Finoa’s board as an observer, May confirmed.

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Germany-based Crypto Custodian Finoa Raises $15M at $100M Valuation