Crypto Lender BlockFi in Talks to Raise Funding at $5 Billion Valuation

BlockFi, a wealth management and trading firm for cryptocurrency holders, is raising new funding just three months after its last round. It's the latest sign that VC interest in cryptocurrency, supercharged by Coinbase’s direct listing two months ago, is overriding a recent steep retreat in crypto prices.

The four-year-old startup is in late-stage talks with new and existing investors to raise several hundred million dollars at a valuation near $5 billion, according to two people familiar with the deal talks. New York–based hedge fund Third Point Management, run by activist investor Daniel Loeb, and London-based venture firm Hedosophia are leading the new financing, said one person, with participation from existing investors.

The round values the company roughly 70% higher than its March funding and 11 times its valuation in August, when investors priced it at $435 million, according to financial data firm PitchBook. The latest financing is not yet closed and the valuation could grow.

BlockFi’s rise in valuation, while unusually steep, is part of a broader acceleration in startup prices. That’s partly because the pace between rounds for fast-growing startups is shrinking as investors fight for stakes in promising companies and startups take advantage of the opportunity to raise money quickly and easily.