ParaFi Capital, a San Francisco, CA-based decentralized finance and blockchain investor, received a strategic investment from an affiliate of Galaxy Digital Holdings Ltd. (TSX: GLXY).
The amount of the deal was not disclosed.
With this transaction, Galaxy Digital – a financial services and investment management company in the cryptocurrency and blockchain technology sector founded by Mike Novogratz – has become a minority shareholder in the firm, joining other ParaFi investors including Bain Capital Ventures and Henry Kravis, Co-CEO and Co-Founder of KKR.
Founded by Ben Forman, ParaFi Capital is a fundamental, research-driven investment firm focused on investing in the blockchain and decentralized finance ecosystem. The firm began investing in DeFi* in 2018, deploying capital behind leading protocols such as Compound (lending and interest accrual), Aave (asset borrowing), Uniswap (automated liquidity provision), and Synthetix (synthetic asset trading). In addition to investing in DeFi protocols, the firm actively supports its portfolio as a power user, liquidity provider, and governance participant.
As of August 31, 2020, ParaFi had assets under management of over $100 million.
ParaFi and Galaxy Digital expect to identify opportunities to jointly co-invest where they can leverage ParaFi’s expertise in the DeFi space together with Galaxy Digital’s global insights and institutional relationships across its full-service platform encompassing Trading, Asset Management, Investment Banking, and Principal Investments.
* DeFi is an ecosystem of open financial products built on the blockchain and delivered as decentralized apps (“Dapps”) to reengineer financial services from the ground up by automating key activities within borrowing, lending, trading, payments, custody, insurance and asset management with the promise of broadening access, increasing transparency, and avoiding costly ongoing input from traditional intermediaries.