Tesseract, a Helsinki-based crypto lending business, has closed a $25 million Series A fundraise led by London’s Augmentum Fintech.
Venture capital firms BlackFin Capital Partners, Concentric, DN Capital, Jabre Capital Partners, LeadBlock Partners and Sapphire Ventures also participated in the round, alongside algorithmic trading firm Wintermute and Coinbase Ventures. Existing backer Icebreaker.vc also invested.
Tesseract did not disclose a valuation.
The lender, which is supervised by the Finnish Financial Supervisory Authority (FIN-FSA), is focused on lending out crypto deposits sourced from institutions to sophisticated investors in the crypto space.
Yichen Wu, CEO and co-founder of Tesseract, told The Block that the platform is “purely institutional on both sides,” which has helped it to keep a low profile.
“There’s a lot of exchanges and folks out there that want to offer an interest account for their retail customers, but it’s not what they do – they’re not credit people,” said Wu. “Crypto credit as a space is extremely underdeveloped. What you see is a lot of folks take other people’s deposits and lend it out to hedge funds and folks on the other side and hoping for the best.”
Wu said Tesseract stands out in the market because it is fully digitized and connected to regulated custodians. He added that the platform is the only example of a “true prime lending product” in the crypto space, in that it can offer inter-exchange cross-margining for clients.
Tesseract said in a press release that it is already a profitable business and that the new funding was primarily a means of bringing in the expertise and professional networks of the company’s new investors.
“We bootstrapped ourselves and we are profitable. We didn’t need the money,” said Wu.
Augmentum, which led the raise, is a fintech-focused venture capital firm that is listed on the London Stock Exchange. Its high profile bets include Monese, Tide and Onfido.
The investment firm launched a decentralized finance (DeFi) strategy in partnership with ParaFi Capital in January 2021.
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