Global payments giant Visa, venture capitalist a16z crypto and Polychain Capital among other investors have poured millions into Anchorage, a blockchain startup that seeks to provide security services against digital assets held by institutional investors.
The San Francisco-based startup announced the conclusion of the Series B funding round which was led by Blockchain Capital on Wednesday, July 10th.
Of particular note are the a16Z crypto and Visa who are both members, similar to Anchorage, of the newly constituted Libra Association. The Swiss-based association is currently made of 28 members with 72 more to join before the official launch of the Facebook cryptocurrency Libra next year.
Anchorage was a little known company until June 18th when Facebook revealed its Libra whitepaper and the company was spotted in the midst of big nameplates including Visa, MasterCard, Uber, and Spotify as founding members of the Libra Association. “Libra is exactly the kind of asset that Anchorage was created to hold,” Diogo Monica, Anchorage co-founder, and president wrote on the day Libra was revealed. “Our custody solution enables online participation with offline assets so that asset-holders don’t face a trade-off between security and usability.”
Each company’s exact investment in the startup has not been disclosed as of yet but so far it has raised a total of $57 million in two funding rounds, both happening this year. A16z led the Series A funding just six months ago that raised $17 million. The startup is showing tremendous momentum following these investments. And now with the onboarding of Visa, it is safe to assume that the startup’s mission has been validated.
“Visa was ‘fintech’ before the term existed, and has always been on the vanguard of financial infrastructure,” said Monica adding that “Visa’s investment in Anchorage is helpful not only to our company but to our industry, as a validation of the entire ecosystem and a recognition that crypto will play a key role in the future of global finance.”
Anchorage plans to use the money to build out its service which mainly involves launching a password-free alternative to securing digital assets. Instead of passwords and relying on cold-storage mechanisms, Anchorage’s solution entails the use of a client’s other employees as co-signatories in withdrawals and deposits to protected accounts. Acceding to a report by technology-focused website TechCrunch, “Anchorage uses both human and AI review of biometrics and more to validate transactions before they’re executed while offering end-to-end insurance coverage.”
This investment is Visa’s publicly known investment in a blockchain startup after the first investment in Chain four year ago. Chain is an enterprise blockchain firm that was later acquired by Stellar-affiliated Lightyear. In a statement, Terry Angelos, SVP and global head of fintech at Visa said that “This investment is consistent with Visa’s global strategy to partner with and invest in emerging fintech companies,” adding “We’re pleased to add Anchorage to our growing investment portfolio.”