Dive Brief:

• Cryptocurrency custody platform Anchorage Digital, the first crypto firm to receive a national trust bank charter, raised $350 million in a Series D funding round valuing the company at $3 billion, the firm announced Wednesday.
• The round was led by global investment firm KKR with participation from Goldman Sachs, Andreessen Horowitz and PayPal Ventures, among others. 
• Anchorage’s latest capital raise comes as the firm is ramping up its strategy to partner with financial institutions that want to provide their customers with custody services for their digital assets.

Dive Insight:

"As more and more institutions look to add crypto services into their offerings, we find ourselves at an inflection point," Diogo Mónica, president and co-founder of Anchorage Digital, said in a statement. "This funding positions Anchorage Digital to meet the unprecedented institutional demand for this rapidly evolving market. We’re grateful that KKR and this wider group of investors shares our vision to expand regulated institutional access to digital assets."  

Anchorage, which Mónica co-founded in 2017, uses a digital asset management system that stores customers' passcodes online through a combination of multiparty, multifactor authentication, advanced fraud detection and specialized hardware.

Wednesday’s funding announcement follows the San Francisco-based company’s new partnership with banking core Finxact, which essentially adds crypto capabilities to Finxact's core systems. 

Mónica said the tie-up allows the banks and financial services companies that use Finxact's core banking platform to offer their own customers access to crypto products and services.

"It's just such an exciting time for us," Mónica told Banking Dive last month. "We're seeing just a lot of business and a lot of different things coming to our plate and we're trying to help as many institutions as possible build products coming into the space."

Anchorage received its charter from the Office of the Comptroller of the Currency (OCC) in January, a significant milestone for the firm and the crypto industry as a whole.

Other digital asset firms to follow in Anchorage’s footsteps include Seattle-based Protego Trust Co. and New York-based Paxos. 

Anchorage said it plans to use the latest funding to enhance its infrastructure solutions, specifically for global financial firms and fintech innovators. It also plans to invest in the latest crypto innovations, add team members, expand its product offerings and grow its client base. 

The company said it has grown its headcount by 175% in 2021, and has reported business growth in excess of 800% in each of the past two years.

Anchorage’s growth comes as the crypto space continues to attract attention from banks, regulators and lawmakers. 

Executives from six of the nation's crypto firms testified last week in front of the House Financial Services Committee, with many touting the financial inclusion benefits of digital assets while urging lawmakers not to overregulate the emerging industry at the expense of innovation.