Chainalysis, a firm that provides governments and companies tools to scan blockchains for nefarious activity, raised a whopping $30 million, the firm announced Tuesday.
The Series B, which brings the total amount raised to $48 million, was led by Accel Partners, a venture capital firm based in Palo Alto. Benchmark, which led its Series A in April, was also involved in the deal. The firm declined to share its valuation with The Block. Chainalysis provides cryptocurrency exchanges, government agencies and banks with software to analyze transactions that occur on blockchain in real-time. In total, over 100 financial firms utilize the firm’s services.
The new funds will be invested in Chainalysis’ product development and will fund a new research and development facility in the UK, according to a press release on the news.
“We are focused on empowering new cryptocurrency use cases like stablecoins and supporting businesses and governments globally as cryptocurrency regulation becomes more defined,” chief executive office Michael Gronager said in a press release. Clients include Paxos and TrustToken, which both support trading of their own USD-backed cryptocurrency.
The stablecoin boom has been a tailwind for the firm as it offers anti-money laundering services to the market inasmuch as it grew its client base. In total, the firm saw its revenues grow four-fold in 2018. The firm, which has been known to service the public sector, saw its revenue stream from the private sector grow, according to Gronager, who said he is not worried about competition from the likes of Bitfury.
“We’ve been accruing this since 2014,” he said. “The industry moves at a fast clip, and it would be very difficult for anyone to catch up or replicate what we’ve built.”
The firm declined to mention specifics about its M&A prospects for 2019, but the $30 million gives them a healthy cushion to acquire other firms as it builds out its business.
Looking forward into 2019, Gronager said he expects more and more small- and medium-sized banks to use the firm’s services. Such firms will require KYC tools to engage in relations with cryptocurrency, which are seeking more traditional financial relationships than in the past.
“Banks — big and small — are interested in banking cryptocurrency companies, and they are interested in building out their own capabilities,” he concluded.