Finoa, a European crypto custodian and staking provider, has secured $15 million in a strategic funding round co-led by Maven 11 and Balderton. The round reflects the company’s growth and profitability amid challenging market conditions and its plans to expand its service offerings.
Finoa initially 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 surpass 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 kept 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.
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 returned 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.
As per Nodes, the company supports staking for over ten blockchains and is the third-largest validator for Celestia. 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 launch.
FinoaConnect allows users to interact with various DeFi protocols, such as lending, borrowing, swapping, and staking, without leaving their custodial wallet. This enables users to enjoy the benefits of DeFi, such as high returns, low fees, and financial inclusion, while maintaining the security and convenience of Finoa’s custody solution.
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.