Funding wrap: Trading, market making, staking see funding after ETF approval

Centralized venues that facilitate trading and staking had a noteworthy funding week as crypto settles into a post-spot bitcoin ETF world.

The week began with HashKey, one of Hong Kong’s two licensed exchanges, announcing a $100 million Series A. The firm’s $1.2 billion valuation gave it unicorn status. HashKey did not disclose its investors, though Bloomberg reported OKX Ventures took part in the round.

The round may heat up an arms race for retail crypto trading in Hong Kong. The company behind OSL, the city’s other exchange, raised $91 million through a share subscription in November.

While announcing the round, HashKey said the funds would partly be used to drive “compliant and innovative development globally.”

Elsewhere in the APAC region, the Taipei-based WOO X exchange drew $9 million in a strategic raise from market makers including Wintermute.

As Blockworks reported earlier this week, market maker and OTC trading service provider Flowdesk raised a $50 million Series B. Notably, the firm was chosen as one of four liquidity providers for Grayscale’s spot bitcoin ETF, meaning it buys and sells bitcoin to make sure shares are fully funded.

In Ethereum world, white-label staking service provider Kiln announced a $17 million round led by 1kx with participation from Crypto.com, Wintermute Ventures and others.

In September, Kiln partnered with Coinbase Cloud to allow partial ether staking, where wallets without the full 32 ether required to operate a validator node could still natively stake their tokens.

Kiln previously raised $5 million in seed funding in May 2022 and announced a $17 million Series A in November 2022. Alongside the raise, Kiln announced it had opened an office in Singapore — its first outside Europe.

A blockchain-enabled car data startup

Digital Infrastructure Inc, the company behind the DIMO car data platform, announced a $11.5 million Series A led by CoinFund this week.

DIMO Mobile is an app that rewards car owners with its native DIMO token in exchange for sharing their vehicle data with DIMO. The data can then be used by car app developers to build better-tailored platforms.

DIMO is an instance of decentralized physical infrastructure (DePIN), a buzzy topic in some crypto circles that refers to projects using blockchain technology for networks in the real world. One popular example is Helium’s decentralized cellular network.

“Since our inception, CoinFund has been a strong advocate for resource networks and middleware,” CoinFund managing partner Alex Felix wrote in a blog post about DIMO and DePIN. “As our scope broadens and the ecosystem matures, there is a compelling opportunity to explore the convergence of physical and digital realms.”

Other notable fundraises

The identity service Root Protocol raised $10 million in seed funding led by Animoca Brands.
Renzo, a liquid restaking hub for Eigenlayer, raised $3.2 million with Maven 11 Capital as lead investor.
Soda Labs, which develops cryptographic techniques for Multi-Party Computation (MPC), is the first recipient of a grant from the COTI Foundation’s $25 million ecosystem fund. Following a pivot to become a privacy-focused Ethereum Layer-2 the fund aims to drive privacy-focused initiatives.

Updated Jan. 22, 2024 at 7:28 am ET with additional context.

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