Goldman Sachs, KKR, a16z Invest $350M in Anchorage Digital

key takeaways

KKR is also investing in Anchorage’s Next Generation Technology Growth Fund II, which will be its first direct equity investment in a digital asset company
This raise is another indication that KKR is interested in diversifying its portfolio into digital assets, after it invested as a limited partner in ParaFi Capital’s flagship fund in September

Anchorage Digital raised $350 million in a Series D funding round led by private equity firm KKR, according to an announcement on Wednesday.

To date, the company has raised $487 million, Diogo Mónica, president and co-founder of Anchorage, said to Blockworks in an interview.

Other investors in the round include Goldman Sachs, Alameda Research, Andreessen Horowitz (a16z), as well as funds and accounts managed by Blockchain Capital, GIC, GoldenTree Asset Management, Innovius Capital, Kraken, Lux Capital and others.

“It speaks volumes to the legitimacy of crypto and how far we’ve come as an industry,” Mónica said. “KKR is one of the top financial investment firms and they believe in what we do. Goldman is one of the largest investment banks in the world. Crypto is exciting to Wall Street, and the names attached to this round speak to that trust,” he added.

In mid-November, KKR was set to lead the investment round that would value the bank at $3 billion, but the amount raised was not disclosed at the time, Blockworks previously reported.

The company confirmed that this capital raise values the company at over $3 billion but declined to share what the valuation was prior to the announcement.

“We see this [capital raise] not only as a boost to crypto adoption, but a way to change finance itself so payments are faster, more transparent and more affordable,” Mónica said.

Anchorage is a digital asset platform for investors that provides services from custody, trading and staking to governance and financing. It previously announced an $80 million Series C round led by GIC in February of this year.

KKR is a global investment firm with a market capitalization of $63.37 billion. It manages multiple alternative asset classes, including a private equity portfolio composed of 221 companies that bring in over $244 billion in annual revenues. As of June 30, 2021, the firm has over $429 billion in assets under management, according to its website.

Anchorage plans to use the capital investment to improve its infrastructure solutions for global financial firms and financial technology innovators. Additionally, the funds will be used to simplify and expedite clients’ engagement with the Web3 economy, grow its client base and expand product offerings.

“It will take speed and capital to accomplish the mission we set out in 2017. We raised this round to provide the secure infrastructure needed for crypto to become an everyday part of our lives,” Mónica said. “Both the additional working capital and the access to advice we’ll receive from firms like KKR, Goldman, Apollo, BlackRock and Wellington will help us grow at the pace required to forge a new standard in finance.”

KKR is also investing in Anchorage’s Next Generation Technology Growth Fund II, which will be its first direct equity investment in a digital asset company. The fund will be dedicated to “growth equity investment opportunities in the technology space,” according to the company.

This investment is another indication that KKR is interested in diversifying its portfolio into digital assets.

In September, Blockworks reported that KKR has invested as a limited partner in ParaFi Capital’s flagship fund. ParaFi manages about $1 billion and focuses on decentralized finance and blockchain technology. Recently, the company has been making moves to launch a $200 million growth fund.

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