VISA Makes Second Crypto Investment; Leading Custodian Anchorage’s $40 Million Funding Round
VISA the payment portal giants for fiat currencies has made its second investment in a crypto startup called Anchorage. The first investment of the payment giants was made 4 years ago when it invested millions in the enterprise blockchain firm called Chain.
Visa led Anchorage’s new funding round worth $40 million along with the venture capital firm focused on cryptocurrencies called Blockchain Capital. Incidentally, both Visa and Anchorage are also among the founding member for the controversial Libra project. The new startup which has grabbed the attention of many in the decentralized space was fairly unknown to the majority of the world, until June 18th, when Facebook released the list of founding members for its much-anticipated libra project. Anchorage’s logo was listed alongside well-recognized brand names like Mastercard, PayPal, Uber, Spotify, and, of course, Visa.
Facebook was at core behind the idea of creating a Swiss non-profit association which currently comprises of 28 founding members and expected to grow by 100 by next year. The main aim of these members would be to promote the cause of global cryptocurrency.
Terry Angelos, the fintech advisor for Visa has recently said that the firm is leaning towards new age startups like Anchorage who promises a secure ecosystem for modern age digital assets. He said,
“companies like Anchorage who are working to provide secure infrastructure to the growing ecosystem of digital assets. Anchorage is building the foundation to support an array of new financial services.”
However, it is still unknown on the exact capital investment of VISA into Anchorage as well as the private valuation of the startup. But, looking at the initial funding round led by VISA, the investments are surely running into tens of millions of dollars.
Anchorage’s Role in Facebook’s Libra
Anchorage is one of the founding members of Facebook’s Libra project, and they would be responsible for designing the technical underpinnings of the Libra project. Diogo Monica, Anchorage's co-founder, and president said that they have been working on their part ever since the day one of the cryptocurrency project Libra when there were basically just two people involved in the project. One was David Marcus who is the head of the project and Morgan Beller who is the co-creator of Libra cryptocurrency, and also heads the strategy at the subsidiary called Calibra.
The Anchorage project is being headed by Monica along with his co-founder and CEO Nathan McAuley, who also happens to be his longtime business partners. Both started their career back in 2011 as in the security team of fintech firm Square. Together they built the firm’s first encrypted card reader. They then moved to join Docker, a cloud software startup in 2015. And finally started working on the Anchorage project together in 2017.
What is Anchorage?
Anchorage provides an alternative service than traditional cold storage platforms, which are often used by investors to secure their cryptocurrency or digital asset holdings. The service of storing your private sensitive data related to crypto holdings if also called cold storage custody. The service usually stashes the private keys of investors, which act as a password for their crypto wallets at offline locations which are from human reach. These offline locations might include remote locations like mountains, or deserted places and even bank safety deposit banks.
In contrast, Anchorage provides a modern-day solution in the form of biometric software along with a system of multiple approvals and human reviews for securing funds of the investors. Monica believes Anchorage methodology provides greater access and control on one holding. The services provided by Anchorage is not exactly cold staking as it provides access to investors at any given point with necessary requirements, which allows them to actively participate in the various cryptocurrency networks, be it investment or trading. While those investors who had put their private crypto holdings in a cold stake would never be able to reap the benefits of a volatile market as easily as those staking their crypto holdings with Anchorage.
Bart Stephens, managing partner of Blockchain Capital, a firm which co-led the new investment round of $40 million along with Visa said that he has never been as impressed by the startup is given the technology they are offering. He went onto explain what made him go for investment into the startup, and said,m
“I found it to be the most compelling product demo I've seen in seven years, having reviewed 4,500 companies”
Stephens also revealed that he registered as a customer of the firm first to get the first-hand experience, and only then decided to lead investment into the startup.
Anchorage being a startup only has 3 employees at this point, and currently provide its staking service for Bitcoin, Ethereum and 50 other digital currencies. Monica also revealed that they would use the new flow of capital from investments for adding more cryptocurrencies to their already diverse portfolio. The firm is also planning to launch additional services such as cryptocurrency exchange and automated book auditing and tax calculations. As per the recent reports, Anchorage has managed two funding round amounting to $57 million in total.