Bitwise Asset Management Completes $70 Million Series B, Valuing the Company at $500 Million-Plus
San Francisco • June 15, 2021
Round co-led by tech investor Elad Gil and crypto venture fund Electric Capital, with participation from tech, crypto and Wall Street investors
Bitwise Asset Management, the world’s largest cryptocurrency index fund manager, today announced the completion of its Series B. The round was led by Elad Gil and Electric Capital, joined by new backers including Daniel Loeb’s Third Point LLC, Daniel Och’s Willoughby Capital, Louis Bacon’s Moore Strategic Ventures, Paul Eisenstein’s Vetamer Capital, and Coinbase Ventures, alongside individual investors Henry Kravis, Stanley Druckenmiller, David McCormick (Bridgewater CEO), Daniel Sundheim (D1 CIO), Kevin Warsh (former U.S. Federal Reserve Governor), Nadeem Meghji (Blackstone executive), Tracey Warson (former Head of Citi Private Bank), Fidji Simo (Facebook executive), Helen Riley (Google X CFO), and several others (full list below). Existing Bitwise backers including Highland Capital, Khosla Ventures, Blockchain Capital, Castle Island Ventures, Alison Davis, Adam Nash, and Naval Ravikant participated as well.
Bitwise, currently profitable, expects to use the proceeds from its Series B round to strengthen its balance sheet and accelerate the national buildout of its organization, team and product suite.
“Five years from now, while some investors will still be trading crypto portfolios themselves, many long-term investors will want to rely on the same financial advisors, processes and brokerages they use for every other asset class,” said Bitwise CEO Hunter Horsley. “Bitwise is focused on equipping investment professionals with the products, education and relationships they need to steward crypto and blockchain investments on behalf of their clients and LPs over the long run. This new round of capital will help us substantially grow our organization, expand our offerings, and cement our position as the premier crypto partner for professional investors.”
The round follows several recent milestones for Bitwise. Assets under management are up more than 20x year over year, crossing $1.2 billion at the end of Q1 and taking the company to profitability. Bitwise’s leadership in serving financial advisors continues to expand, with over 200 financial advisory firms using Bitwise products and research to help clients access the cryptocurrency asset class. To deliver on its commitment to education and relationship support, the company has already doubled the size of the research, client service and sales teams since the start of the year and plans to double them again by year-end.
Bitwise’s product suite has continued to grow as well. In February, the company launched the world’s first DeFi index fund, the Bitwise DeFi Crypto Index Fund, which has seen rapid growth since inception. In May, the firm saw the launch of the Bitwise Crypto Industry Innovators ETF (NYSE: BITQ), the first crypto industry ETF, which tracks the Bitwise Crypto Innovators 30 Index of pure-play crypto equities. These new funds join the flagship Bitwise 10 Crypto Index Fund (OTCQX: BITW), the world’s largest crypto index fund, as well as the Bitwise Bitcoin Fund, the Bitwise Ethereum Fund, and other products. With the additional funding, Bitwise plans to continue to introduce new and innovative products to access the wide range of crypto opportunities.
The round was co-led by two existing investors, Elad Gil and Electric Capital. Elad is an accomplished Silicon Valley investor who has advised or invested in over a dozen iconic companies, such as Airbnb, Airtable, Coinbase, Figma, GitLab, Gusto, Instacart, Opendoor, Pinterest, PagerDuty, Samsara, Square, Stripe and Wish. Electric Capital is one of the largest crypto venture capital firms and an early investor in many leading crypto protocols and companies, such as Bitwise, Bitnomial and Kraken. “Bitwise has established itself as the market leader among financial advisors and has tremendous momentum,” said Gil. “We believe that their best-of-breed crypto investment solutions, education, and client service sets them up to be the premier player in what they do.”
“Bitwise is purpose-built for crypto, and seamlessly blends technology with asset management to navigate a complex space that requires fundamentally different capabilities from other asset classes,” said Electric Capital Managing Partner Avichal Garg. “Their pure-play focus will serve Bitwise and their clients well as this exciting space continues to evolve.”
Joining the round are several new backers from traditional financial circles, including Henry Kravis, co-founder of the private equity firm KKR, and Daniel Loeb’s Third Point LLC.
“Crypto is an exciting category with a lot of promise but also unique challenges,” said Kravis. “Bitwise is the best at what they do, and essential for many professionals to be comfortable participating in this growing space.”
“We’re thrilled to be backing Bitwise,” said Loeb, Third Point’s CEO and CIO. “Bitwise has assembled a best-in-class team, has built professional-grade products, and is doing all the right things to build an enduring institution in the crypto economy.”
The full list of new Bitwise institutional investors includes Daniel Loeb’s Third Point LLC, Daniel Och’s Willoughby Capital, Louis Bacon’s Moore Strategic Ventures, Paul Eisenstein’s Vetamer Capital, Coinbase Ventures, ParaFi Capital, and Alison Davis and Matthew Le Merle’s Blockchain Coinvestors; new individuals investing personally include Henry Kravis, Stanley Druckenmiller, Daniel Sundheim (D1 CIO), David McCormick (Bridgewater CEO), Kevin Warsh (former U.S. Federal Reserve Governor), Nadeem Meghji (Blackstone Head of Real Estate Americas), Fidji Simo (Head of Facebook App), Helen Riley (Google X CFO), Carrie Schwab-Pomerantz (Charles Schwab Foundation President), Tracey Warson (former Head of Citi Private Bank), Charles Goldman (former AssetMark CEO), Mary Cranston (Visa Board Director), Carolyn Everson (former Facebook VP), Julie Zhuo (former Facebook VP), Asha Sharma (Instacart COO), Ashley Yuki (Instagram Product Director), Howard Akumiah (Spotify Product Director), Ranjana Clark (MUFG Head of Global Transaction Banking), Abby Adlerman (Boardspan CEO), Katia Verresen, Rebecca Macieira-Kaufmann (former Head of Citigroup’s International Personal Bank), Ben Stein (Spruce House Managing Partner), Dave Fogel (IndexIQ Co-founder), C.J. Fitzgerald (Summit Partners Senior Advisor), Paul Sallaberry (U.C. Davis Foundation Board of Trustees), Tom Schmidt (Dragonfly Capital General Partner), Stani Kulechov (Aave Founder), and Robert Leshner (Compound Labs Founder).
Risk Disclosure and Important Information
This press release is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal, nor shall there be any sale of any security in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that jurisdiction.
The opinions expressed in this press release are intended to provide insight or education and are not intended as individual investment advice. We do not represent that this information is accurate and complete and it should not be relied upon as such.
All investing is subject to risk, including the possible loss of all of the money invested. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.
Investments in Bitwise’s products will be subject to the risks associated with investing in cryptoassets, including cryptocurrencies and crypto tokens. Because cryptoassets are a new technological innovation with a limited history, they are a highly speculative asset. Future regulatory actions or policies may limit the ability to sell, exchange or use a cryptoasset. The price of a cryptoasset may be impacted by the transactions of a small number of holders of such cryptoasset. Cryptoassets may decline in popularity, acceptance or use, which may impact price. The technology relating to cryptoassets and blockchain is new and developing. Currently, there is a limited number of publicly listed or quoted companies for which cryptoasset and blockchain technology represents an attributable and significant revenue stream.
In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from social, economic or political instability in other nations. Emerging markets involve heightened risks related to the same factors as well as increased volatility and lower trading volume. Narrowly focused investments and investments in small companies typically exhibit higher volatility.
Bitwise is the index provider for certain products. There is no guarantee or assurance that the methodology used to create the index will result in funds that track that index achieving positive investment returns or outperforming other investment products. Indices are unmanaged and do not include the effect of fees. One cannot invest directly in an index. The Fund is non-diversified and will not invest in crypto assets directly or through the use of derivatives and also will not invest in initial coin offerings. The Fund may, however, have indirect exposure to crypto assets by virtue of its investments in Crypto Industry Innovators that use one or more crypto assets as part of their business activities or that hold crypto assets as proprietary investments.
Certain of Bitwise’s investment products are available to institutional and individual accredited investors through periodic and ongoing private placements. The investment objective of each product is for its shares (based on digital assets per share) to reflect the value of the digital assets held by such product, less expenses and other liabilities. Because there is currently no redemption program for certain products traded on a secondary market there can be no assurance that the value of such product’s shares will reflect the value of the assets held by such product, less expenses and other liabilities, and the shares of such product may trade at a substantial premium over, or a substantial discount to, the value of the assets held, less expenses and other liabilities; therefore such products may be unable to meet their investment objectives.
For the Bitwise Crypto Industry Innovators ETF (NYSE: BITQ), which tracks the Bitwise Crypto Innovators 30 Index, Exchange Traded Concepts, LLC serves as the investment advisor of the fund, and the fund is distributed by SEI Investments Distribution Co. (SIDCO), which is not an affiliate of Exchange Traded Concepts, LLC or any of its affiliates. It is important to carefully consider a fund’s investment objectives, risk factors, charges, and expenses before investing. For BITQ this and additional information can be found in the fund’s full or summary prospectus, which may be obtained by visiting www.BITQETF.com.
Based in San Francisco, Bitwise is one of the largest and fastest-growing crypto asset managers, offering both index and active strategies across a wide array of investment vehicles. The firm is known for creating the world’s largest crypto index fund (OTCQX: BITW), a suite of crypto-focused equity and futures ETFs, and investment products that span Bitcoin, Ethereum, DeFi, NFTs, and the Metaverse. Bitwise focuses on partnering with financial advisors and investment professionals to provide quality education and research. The team at Bitwise combines expertise in technology with decades of experience in traditional asset management and indexing, coming from firms including BlackRock, Blackstone, Meta, and Google, as well as the U.S. Attorney’s Office. Bitwise is backed by leading institutional investors and asset management executives, and has been profiled in Institutional Investor, CNBC, Barron’s, Bloomberg, and The Wall Street Journal.
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