Goldman Sachs and Barclays bank invest in Alan Howard’s crypto platform

Goldman Sachs and Barclays have invested in Elwood Technologies, the cryptocurrency trading platform founded by British hedge fund billionaire Alan Howard, to make a new bet on mainstream digital asset adoption.

The two banks invested alongside venture capitalist Dawn Capital and the risk divisions of German lenders Commerzbank and Galaxy Digital, US billionaire Mike Novogratz’s crypto finance group. The round, Elwood’s first outside fundraising, valued the six-year-old company at around $500 million, according to people familiar with the terms.

Elwood is betting that traditional financial institutions — from hedge funds to banks and family offices — will pour more money into digital assets despite the sharp drop in crypto asset prices. The market value of the top 500 digital assets has fallen by more than half from its highs over the last year, according to data compiled by CryptoCompare the Financial Times. Bitcoin fell below $30,000 for the first time since July on Tuesday.

The Elwood funding round was agreed ahead of the recent weekly slide. Established as a vehicle to manage Howard’s personal crypto fortune, the company provides market data and trading infrastructure to major investors in digital assets.

Chief Executive James Stickland shrugged, calling the fundraiser “another validation of crypto’s longevity.”

“We receive investments from financial institutions that don’t expect to see massive returns within 15 minutes. They’re investing in infrastructure,” he said. “I think it’s a reassuring message.”

The $70 million fundraising cements a change in direction for Elwood, which was still focused on wealth management and looking to offer in 2019 Crypto fund portfolios for institutional investors. Elwood is now selling the technology it developed itself to manage its own crypto investments to other clients, said Stickland, who joined the company in 2020 to lead its quest to become a software provider.

“With institutional demand for cryptocurrency increasing, we have been actively expanding our market presence and capabilities to meet client demand,” said Mathew McDermott, global head of digital assets at Goldman Sachs. He added that the investment reflects the “continued commitment ‘ of the US Bank of Digital Assets.

Elwood offers a technical platform similar to BlackRock’s Bloomberg terminal or Aladdin portfolio management system, Stickland said, which aims to plug into financial institutions’ existing trading software to help them manage and trade their crypto portfolios .

In February, the company announced a partnership with Bloomberg to connect its software to the US trading platform’s order management system.

“If the infrastructure isn’t there and you can’t verify the quality of the underlying architecture for yourself, you’re never really going to get the volume to match the opportunity,” Stickland said.

Elwood will remain majority owned by Howard, who was its primary investor prior to the transaction. Hedge fund co-founder Brevan Howard is one of the most prominent British investors to have made the leap into crypto markets.

Goldman Sachs and Barclays bank invest in Alan Howard’s crypto platform Source link Goldman Sachs and Barclays bank invest in Alan Howard’s crypto platform

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