Austin-based bitcoin firm Unchained Capital has scored $60 million to expand

by James · April 20, 2023

Austin-based bitcoin firm Unchained Capital has scored million to expand

Despite ongoing turbulence in the cryptocurrency market, Austin-based Unchained Capital has landed $60 million for expansion.

Founded in 2016, bitcoin financial services develops technology for individuals and businesses that store long-term wealth in bitcoin and require private key ownership.

Bitcoin is a digital currency – or cryptocurrency – that is not backed by any government or central bank. Users can exchange it among themselves without the involvement of traditional intermediaries such as banks and governments.

Unchained has said that its native bitcoin ecosystem ensures that users can secure and maximize the value of their bitcoin holdings over multiple generations. The firm currently secures more than $2 billion in bitcoin across thousands of keys, according to the company.

Unchained also offers bitcoin-backed loans and said it has originated $500 million of such loans since 2017. Other services include a trading desk, where clients can buy bitcoin directly.

The Series B funding round was led by Chicago-based Valor Equity Partners, with participation from existing investors NYDIG, Trammell Venture Partners, Ecliptic Capital and Highland Capital Partners. Unchained has raised a total of $115 million since launch.

The new cash infusion will be used to add more customers and expand product development and marketing.

Unchained, headquartered in downtown Austin in the Littlefield Building at 601 Congress Ave., has 85 employees and plans to grow its headcount by 5% per quarter through the end of the year, a company spokesperson said.

How does the bitcoin market work?

The Bitcoin market has been a roller coaster ride. Just months ago, all forms of cryptocurrency appeared to be going down in flames, with bitcoin plunging from nearly $50,000 at the start of 2022 to less than $17,000 in early 2023.

Unchained was not immune, cutting its workforce by 15%, or 16 employees, in mid-November, according to bitcoin trade publications.

In March, bitcoin had risen more than 60%, but the rate going forward is still uncertain. Bitcoin rallied toward $29,000 on Wednesday as traders pondered the likelihood that interest rate cuts by the Federal Reserve may be further out than they thought.

Vivek Pattipati, a partner at Valor who will join Unchained’s board, acknowledged the challenges but said Unchained is positioned to be a market leader.

“In the midst of market chaos, Unchained has emerged as a highly trusted bitcoin custody and financial services provider through superior technology, risk management, regulatory compliance and customer service,” he said. “Especially in lending, the company has differentiated itself by minimizing risk for both lender and borrower, leading to resilience and an extraordinary opportunity to gain market share.”

More:Austin’s job market is confusing. Here’s what you should know.

What’s in store for Austin venture capital and the job market?

Venture capital investment is important to the Central Texas economy because it allows businesses—both startups and later-stage companies—to create jobs.

But with economic uncertainty looming, the level of investment dollars flowing into Austin in 2023 remains to be seen. Last year, despite a general decline in US venture capital funding, Austin startups fared well, scoring the second highest amount in local history.

Austin-based early-stage companies raised $5 billion in funding in 2022, down slightly from the record $5.4 billion that startups received in 2021, according to a report by the Austin Chamber of Commerce and Opportunity Austin.

More:Will dollars keep flowing in for Austin startups in 2023? Here’s what experts say

Other Austin deals this year include a $24 million investment in Strangeworks, which designs quantum software tools for software developers, system administrators, researchers, technical staff and chief information officers.

Meanwhile, tech giants with a large Austin presence — including Google, Facebook parent company Meta, Austin-based Tesla and Round Rock-based Dell Technologies — have all laid off thousands of employees since late last year.

Meta recently announced another big round of layoffs. The company has cut at least 220 Austin jobs, according to a WARN letter — short for Worker Adjustment and Retraining Notification Act.

Facebook said late last year that it would not use an office space it had long expected to expand into in downtown Austin. Facebook had signed a lease to occupy all 589,000 square feet of office space in the mixed-use tower called Sixth and Guadalupe, but it is now subleasing the space.