Paxos has raised the sum of $300 million in a just-concluded Series D funding round bringing the company’s valuation to $2.4 billion. As reported by Coindesk, the fundraising was led by Oak, a growth capital firm focused on healthcare and fintech, with participation from old investors including Declaration Partners, PayPal Ventures, Senator Investment Group, and Mithril Capital amongst others.
Growing Valuation of Paxos
Coming off as one of the few unicorns in the growing digital currency ecosystem, Paxos, founded in 2012 has dedicated its business model to creating infrastructures to support mainstream firms willing to offer cryptocurrency services to their customers. Specifically, Paxos has a very functional partnership with online payment service provider PayPal Holdings Inc (NASDAQ: PYPL) and helps to power the company’s widely acclaimed crypto payment services.
Just in December 2020, Paxos announced it raised $142 million in a Series C round, making the case that the injected liquidities were all geared toward scaling the company’s growing business.
“We’re raising this capital not because we think this is some kind of local maximum,” Paxos CEO and co-founder Charles Cascarilla said in an interview. “This really puts us in a great position now to scale the business and take advantage of opportunities to make acquisitions.”
As Paxos operates more as a Business-2-Business (B2B) outfit, Charles said the funds will help to build an infrastructure that is targeted at reassuring its clients of its sustainability.
“I would really call this confidence capital,” he said. “What this is about is our customers knowing that we’re going to be around for the next five to 10 years so that they can feel comfortable using us as their infrastructure.”
While providing the backing for Paypal and Paypal-owned Venmo, Paxos also supports other emerging players in the crypto industry including Revolut, Credit Suisse Group AG (SWX: CSGN), and Societe Generale SA (EPA: GLE) amongst.
Paxos as a Regulated Bank in the US
As one of the major milestones for the company, the United States Office of the Comptroller of the Currency (OCC) gave its nod in a preliminary approval to operate the Paxos National Trust Bank, as one of the few crypto banks around.
The approval, which has also been given to Anchorage and Protego, will allow Paxos to carry out custodial and management services for digital assets, stablecoin reserves, and crypto-based services like payments, trade, KYC, and the operation of a digital currency trading platform. This will notably expand Paxos’ foothold in the cryptocurrency industry.
The direct listing of Coinbase Global Inc (NASDAQ: COIN) opened a new chapter for the broader crypto ecosystem. While other outfits including eToro and Kraken are now planning towards a grand entry into the public markets, Charles said the firm has no plans to go public anytime soon. However, he noted that the company’s bogus valuation is evidence the market has changed in the past years.
“I didn’t think it was gonna happen so quickly,” he said. “But then again, the space has really shifted so quickly.”