SFOX, a cryptocurrency prime dealer for institutional and large-scale investors, including funds, announced today that it had raised Series A funding of $22.7 million. Contributors to the funding round include Y Combinator, Blockchain Capital, and others.
The company is planning on using this Series A funding for building infrastructure for their institutional crypto asset management platform. SFOX was founded in 2014 and boasts over $9 billion in transaction volume to date.
Improving Liquidity
SFOX Co-Founder and Partner at Tribe Capital, Arjun Sethi, thinks that a lack of liquidity is slowing institutional adoption of cryptocurrencies.
“Liquidity represents one of the most significant barriers to institutional cryptocurrency adoption. What has always excited us about SFOX and differentiates them from other players is that they provide access to a global integrated order book, sourced from exchanges, OTC desks, and market makers. This means institutions can trade from a single account and have the ability to buy and sell high volumes without impacting prices. This is exactly what institutional investors looking to embrace cryptocurrencies need today and in the future, as the ecosystem becomes more fragmented.”
Increasing Demand From Institutions
The CEO of SFOX, Akbar Thobhani, suggests that demand from institutional investors is on the rise:
“We’ve seen high interest from our clients in expanding their exposure to crypto assets. Institutions need a full service asset management platform that meets the unique needs of cryptocurrency. This is not being fulfilled by traditional tools and current platforms. We’re in a great position to provide these rails. This investment will allow us to pursue this evolution.”
Sethi notes that both uncertainty and volatility have made potential institutional investors reluctant, but that demand is increasing and has been present for some time:
“We continue to observe sustained and increasing demand from institutions that want to include cryptocurrencies as part of a diverse portfolio but are reluctant to do so because of uncertainty and volatility.”
