Cryptocurrency startup BVNK (pronounced "bee-vee-en-kay") has closed a $40 million Series A funding round at a $340 million post-money valuation. Interestingly, Tiger Global is leading the round despite being in the news because they’ve experienced a $17 billion loss during this year’s tech stock sell-off.
Other investors in today’s funding round include The Raba Partnership, Avenir, Kingsway Capital, Nordstar, Concentric, Base Capital and various business angels. BVNK signed its term sheet last month.
BVNK offers banking services and payments for crypto-native businesses. Companies using BVNK can accept payments in both fiat and cryptocurrencies, hold hundreds of different currencies and crypto assets, and send funds all around the world.
Before landing with this product offering, the BVNK team has been working on a consumer platform. It was a more traditional crypto exchange with a focus on emerging markets and remittance.
“We launched originally a retail business and now it’s a purely B2B business. We spent the last year head-hunting the best talent in the crypto space. We now have 120 people in the company,” BVNK co-founder and CEO Jesse Hemson-Struthers told me.
While cryptocurrencies are currently having a very bad week, many businesses have been looking at ways to start supporting cryptocurrencies in one way or another. But it’s been a difficult process as many banks around the world simply don’t want to work with cryptocurrencies at all.
“Financial services are really not made for crypto at all,” co-founder and Chief Product Officer George Davis told me.
BVNK is targeting both crypto native and crypto curious companies, such as “payment companies that are being pushed to accept crypto,” Davis said.
The main hook to get new customers is banking. You can use BVNK to replace some of your traditional bank accounts. From your BVNK account, you can buy, sell, send and receive both fiat currencies, such as EUR, GBP and USD, as well as cryptocurrencies, such as BTC, ETH and USDC.
On top of that, BVNK has built a payments service. It is both a way to collect payments in crypto and a fiat-to-crypto on-ramp for people who want to buy crypto assets. Businesses using BVNK can leverage this API with their own customers.
The fiat on-ramp specifically is quite interesting, as BVNK wants to compete directly with MoonPay. If you’re not familiar with MoonPay, it’s a popular on-ramp API for other products. For instance, many crypto wallets embed MoonPay in their apps so that users can buy crypto assets with a debit card.
BVNK thinks it can build a cheap alternative thanks to open banking. Instead of relying on debit cards, BVNK asks people to log in with their bank account information and initiate an instant payment from there. This way, BVNK saves on card processing fees.
So far, BVNK has attracted around 120 customers. “We’ve been profitable as a business,” Hemson-Struthers told me. The company says it currently processes over $2 billion in annualized payments volume.