Finoa, a prominent crypto custodian and staking service provider based in Germany, has successfully raised $15 million in a strategic funding round.
The round, co-led by Maven 11 Capital and Balderton Capital, marks a significant achievement for the company, especially in the context of the current challenging market conditions. Other participants in the round included Blue Bay Ventures, Signature Ventures, Coparion, and Venture Stars.
Expansion beyond initial fundraising goals
Initially, Finoa aimed to secure $5 to $6 million from its existing investors. However, the company’s recent return to profitability and the heightened interest from external investors allowed it to exceed the target significantly. The fundraising success comes almost three years after Finoa’s $22 million Series A funding in April 2021. Christopher May, co-founder and co-CEO of Finoa, revealed that instead of pursuing a larger Series B round, the company opted for the smaller yet strategic round to fuel its growth.
A source familiar with the matter disclosed that the funding round maintained Finoa’s valuation at a steady $100 million, the same as its Series A valuation in 2021. The flat valuation is notable given the turbulent market conditions that have affected many in the crypto space.
Return to profitability and revenue streams
Founded in 2018, the company faced a period of losses in 2021 and 2022 due to challenging market conditions and crypto market downturns. However, the company rebounded to profitability in the fourth quarter of 2023, driven by a market recovery and growth in its staking business. Finoa Consensus Services, its staking unit launched in May 2022, has amassed over 500 million euros in assets and now accounts for nearly 60% of Finoa’s total revenue. The company supports staking for over ten blockchains and is the third-largest validator for Celestia, as per Nodes. Guru data. Finoa’s flagship custody service contributes around 30% of revenue, with the remaining coming from brokerage and other services.
Finoa is expanding its service offerings with the introduction of FinoaConnect, a new feature providing access to decentralized finance (DeFi) applications through its custodial wallet infrastructure. Currently in beta, the service is expected to generate additional revenue upon its full launch.
Finoa’s competitive edge and plans
The company stands out among its competitors, like Fireblocks and Anchorage, as a qualified custodian in Europe, holding licenses from the German Federal Financial Supervisory Authority. The company, currently with a team of about 50 employees, has no immediate aggressive hiring plans. The cautious approach comes after a period of downsizing from a peak staff count of over 100 in 2021 due to market conditions.
As part of the strategic funding round, Balder Bomans, the managing partner at Maven 11, has joined Finoa’s board as an observer, further strengthening the company’s strategic positioning in the market.
Finoa’s successful fundraising and strategic decisions amidst a challenging crypto market landscape demonstrate its resilience and potential for continued growth. With its diversified revenue streams, innovative service offerings, and strong regulatory standing, Finoa is well-positioned to thrive in the evolving crypto custody and staking services sector.