The high-profile financial disasters at crypto exchange FTX and crypto lender BlockFi have prompted many people who hold significant sums of Bitcoin to rethink how their tokens are secured and whether they're vulnerable to similar collapses in the future.
While a few bad actors have cast a shadow on the crypto industry, some companies have found themselves well-positioned to not only weather hard times, but to capitalize on them.
That's the case for Austin-based Unchained Capital Inc., a Bitcoin financial services startup that provides a collaborative custody model for storing tokens and helps people get loans and set up retirement plans using the cryptocurrency.
As big cracks began to appear in the crypto world in the fourth quarter of 2022 and currency values tanked, Unchained had one of its best quarters ever in terms of new clients, co-founder and CEO Joe Kelly said.
"That was really the result of a lot of people seeing these models failing and understanding, as they're escaping them or fleeing them, or they want to do something with their assets that just feels safer and more robust ... that Unchained as a model was the right choice," he said. "So there's been a lot of proof there."
He said that repeated in March, when Silicon Valley Bank collapsed, resulting in "a surge of clients and interest in Bitcoin in our flavor of financial service and custody around Bitcoin."
Unchained on April 18 announced it had raised $60 million in series B funding to expand its team in Austin and remotely, as well as improve upon and develop new Bitcoin-based products. The investment was led by Valor Equity Partners. Existing investors NYDIG, Trammell Venture Partners, Ecliptic Capital and Highland Capital Partners also joined the round.
The startup, founded in 2016, currently has 81 full-time employees. About 35 of them are based in Austin, where the company has its headquarters in the Littlefield Building at Sixth Street and Congress Avenue. It has four suites there, with one of them reserved for its partnership with Bitcoin Commons, a coworking and event space provider.
Unchained Capital's downtown Austin headquarters
Unchained said its collaborative custody platform has secured more than $2 billion in Bitcoin and has originated more than $500 million in Bitcoin-collateralized loans since 2017.
With the new funding, Unchained plans to hire four to five new employees each quarter this year, as well as expand on its financial services offerings. The founders note that while the company is all about Bitcoin, its employees don't necessarily have to be crypto enthusiasts.
Kelly co-founded Unchained with Dhruv Bansal. The two were previously on the founding team of Infochimps, a cloud data company that raised about $2.6 million before being acquired by professional services company CSC in 2013. The duo launched Unchained in 2017.
Unchained had raised about $33 million before securing its series B round, according to Crunchbase.
Part of the startup's success is tied to its tight focus on Bitcoin, as opposed to the many other cryptocurrencies on the market, Bansal said. The crypto community is big and broad, but those who are tightly focused on Bitcoin tend to operate in smaller, tighter circles.
"It's interesting because I think Austin is a better Bitcoin town than San Francisco — better than a lot of what's happening on the West Coast," Bansal said. "Austin is widely recognized in the Bitcoin community as being a really great place to be."
