Ledgible, an Atlanta-based tax reporting and portfolio tracking platform dedicated to cryptocurrency, has raised $20 million.
The round was led by EJF Capital LLC through its EJF Silvergate Ventures Fund. Other participants in the investment included Jam Fintop, Thomson Reuters Ventures, TTV Capital, Fenbushi US, Commerce Ventures, Nathan McCauley, and Perkins Coie.
Ledgible, which recently rebranded from Verady Inc., has approximately 30 employees and thousands of clients. The investment will go towards hires in sales and marketing, in addition to enhancing its software, CEO Kell Canty said.
Why it matters to Atlanta
Ledgible adds to Atlanta’s growing cryptocurrency and digital asset industry. Blockchain payment provider BitPay has a growing list of partners that accept cryptocurrency, and digital asset startup Bakkt went public last year. This month, the Atlanta Blockchain Center, a startup incubator, is set to open in Buckhead.
Canty refers to the city’s reputation as a fintech hub, along with its local university talent from the Georgia Institute of Technology and Emory University, as a reason Atlanta has serious potential to compete with Miami or New York as a crypto hot spot.
Atlanta doesn’t get the recognition it deserves as a crypto hub, said Canty, because of its high concentration of business-to-business startups that don't spend as much on advertising and marketing to consumers.
About the company
Ledgible platform, which is primarily targeted toward tax professionals although can be used directly by consumers, ensures that a client's crypto is reported correctly to the IRS by hooking up a client’s crypto assets to perform checks and standardization to calculate taxes owed that can be added to their main tax return.
A platform that specializes in crypto auditing is needed, Canty says, due to the nuances of its taxation that would require bringing all of the data together to ensure everything complies with tax laws.
Prior to launching Ledgible, Canty spent several years having other entrepreneurial pursuits as well as helping regulate the virtual currency industry.
From 2013 to 2014, he was a founding member of the Bitcoin Regulatory Affairs Committee, a committee created by the Bitcoin foundation to assess what happens in the regulatory landscape and monitor any changes in digital currency.
Afterward, he founded another Atlanta-based company Coinpliance LLC ,which ran a software to help companies focused on Bitcoin automate the process of compliance with regulations.
An unsteady time for investments and crypto
The investment comes at a time when many investors are pulling back money into startups.
In recent months, valuations have been reset, going down anywhere from 40% to 70%. Companies don't tend to seek outside capital if their valuations decrease from when they previously raised money. Tech startups are cutting back costs and laying off employees in Atlanta and around the country.
CEO Kell Canty says investors are confident in Ledgible because of the company's recently signed contracts. Cryptocurrency is also an industry that grows faster than others during economic turmoil, he said.
The company signed a deal with the financial technology giant Fidelity National Information Services Inc. to power crypto through its entire capital markets group. Thomson Reuters Corp. will also be selling the company’s platform nationally to all its CPAs.
“There is a strong thesis behind the fact that crypto, just like it did during the pandemic, during these current macro environments in the economy, will continue to build and grow, whereas other areas may not as fast,” said Canty.
Investors are also making a bet on the company as the crypto market has taken a hit in recent months.
Cryptocurrency values have been dropping. Luna, the sister token of stablecoin Terra USD, dropped to $0 last month after at one point being worth over $100. Last week, Coinbase said it extended a hiring freeze for both new and existing positions and rescinded some job offers.
