With $1 billion created a single financing record in the crypto industry, what kind of company is NYDIG?
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Author: HU Tao, ChainCatcher
NYDIG is a company focused on providing full-stack solutions for Bitcoin.
On November 14, Bitcoin institutional-grade solutions provider NYDIG (New York Digital Investment Group) announced the closing of a $1 billion equity financing at a $7 billion valuation, making it a single funding round record in crypto industry history. Previously, a single financing record in the crypto industry was the $900 million completed by FTX in July.
The funding, led by WestCap with participation from Bessemer Venture Partners, FinTech Collective, Affirm, FIS, Fiserv, American Vanguard, Morgan Stanley and New York Life, will be used to further develop NYDIG’s institutional-grade bitcoin platform, using the recently upgraded Bitcoin protocol with features such as bitcoin and flash payments, asset tokenization and smart contracts.
So, why can NYDIG attract so many traditional financial giants and obtain huge financing of $1 billion dollars? What kind of crypto company is it?
According to official information, NYDIG positions itself as a gateway to a new era of financial products, making it easier for everyone to obtain Bitcoin and providing power for a more inclusive economic system. It obtained the New York BitLicense license in 2018. Specifically, NYDIG is a company that provides comprehensive and institutional-level solutions for traditional financial companies, including the purchase, custody, and transaction of Bitcoin.
In other words, almost all of NYDIG ‘s business revolves around compliant Bitcoin solutions, and other encrypted assets such as ETH and Litecoin rarely appear in official information.
“NYDIG plays a unique role in the industry, empowering companies of all types to incorporate Bitcoin in a secure and compliant way. We are proud to partner with Robby and his outstanding NYDIG team as they forge new paths to accessibility and further accelerate Bitcoin adoption,” said Scott Ganeles, partner at WestCap.
In recent years, NYDIG has helped many well-known institutions execute bitcoin purchase transactions. For example, in October this year, it helped Houston Firefighters Pension Fund purchase $25 million worth of bitcoin and ETH, and in January this year, it assisted Marathon Patent Group to purchase approximately $1.5 billion in Bitcoin and assisted insurance giant MassMutual to purchase about $100 million in Bitcoin in December last year.
In addition, NYDIG offers clients a variety of products such as Bitcoin custody, Bitcoin strategy funds, Bitcoin-based collateralized lending, and structured solutions. All of the above products are built on a protection platform with integrated execution, custody, AML and KYC. In June of this year, the company’s two bitcoin fund managements reached $340 million, with a total of over $1 billion worth of assets under custody.
NYDIG also completed several acquisitions this year to improve its solutions. In November of this year, the company acquired the Bitcoin Lightning Network payment application Bottlepay to integrate it into its existing full-stack Bitcoin platform. In September of this year, the company acquired Etale, an order management software, to improve its Bitcoin transaction execution tools. In April of this year, the company acquired Arctos, a Bitcoin mining service company, to provide Bitcoin miners with a series of solutions such as equipment procurement and financing, custody, derivatives and hedging.
NYDIG is also offering its full suite of Bitcoin-based solutions to third parties, including Bitcoin accounts, Bitcoin payroll, user loyalty programs, Bitcoin donations and more. The goal is to help third-party organizations gain more users interested in bitcoin. Aptar’s broker-dealer MMLIS, STAR Bank, Q2 Digital Bank, MVB Bank and many other traditional financial institutions have partnered with NYDIG.
NYDIG Chief Innovation Officer Patrick Sells said that approximately 1,000 banks, credit unions, fintech companies and retailers are expected to offer crypto-related products through NYDIG by 2022.
As for the team, NYDIG was founded by Ross Stevens, the founder of Stone Ridge, an asset management company. The board of directors includes Ted Mathas, chairman of New York Life, and David B. Heller, former co-head of Goldman Sachs. The head of regulatory affairs is Ben Lawsky, the former head of the Department of Financial Services in New York and the founder of Bitlicense. Ronnie Wexler, a former Goldman Sachs partner and former president of Alibaba, and Tejas Shah, a former Goldman Sachs partner, both joined the firm in September as head of global business development and head of global trading, respectively. John Dalby, former CFO of Bridgewater Capital, became the firm’s CFO in May of this year.
In general, NYDIG provides compliant Bitcoin full-stack solutions for the traditional market, aiming to lower the barriers for traditional institutions to enter the Bitcoin market, and has become a major partner for a large number of financial institutions to support Bitcoin transactions and custody.
