On Friday, Austin-based fintech company Unchained Capital announced the closing of its $25 million Series A funding round.
Unchained Capital has built a financial services platform that caters to long-term bitcoin holders. Like other crypto companies, it allows investors to buy and store bitcoin in a secure vault. But beyond that, the company has also built a business supplying loans that use bitcoin as collateral.
While securing loans with collateral is nothing new — this is what both mortgage companies and pawn shops do — securing a loan with bitcoin provides a unique opportunity. As the popularity of bitcoin grows, many people are buying bitcoin to hold onto for many years, that way they won’t miss out the next time it surges in value. But people who hold onto bitcoin for long periods likely won’t want to sell it when they need access to cash.
Bitcoin collateral loans provides an alternative, allowing bitcoin owners to get access to cash without losing ownership of their assets.
This funding round was led by bitcoin tech solutions firm NYDIG and continues the partnership between the two organizations. In February 2021, NYDIG provided the company with $50 million in lending capital, which helped Unchained Capital rapidly develop its technology and accelerate its lending business. Over the past six months, Unchained Capital saw a 5x increase in its bitcoin-collateralized lending business.
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