Crypto data firm Kaiko raises US$53m during market rout

BLOCKCHAIN analytics firm Kaiko raised US$53 million from new and existing investors in its latest financing round, even as crypto-exposed companies struggle through a rout in digital assets.

The series B deal tripled Kaiko's valuation from its last round in June 2021, a spokesperson for the firm said, declining to provide exact figures. The investment was led by Alibaba backer Eight Roads, alongside French venture capital firm Revaia and existing investors Alven, Point Nine, Anthemis and Underscore.

Kaiko chief executive officer Ambre Soubiran, in an interview with Bloomberg, described the past 2 months as "a marathon", with investors growing increasingly cautious about deploying capital to crypto-linked businesses.

"What was challenging, in all honesty, was the due diligence and closing process because we were really, really under scrutiny," she said. "They went into many, many details to make sure that there was barely any risk in the investment."

As a data provider for clients and partners including Deutsche Boerse, ICE Global Network, Messari and Paxos, Kaiko offers institutional investors and businesses a mix of market data in crypto and decentralised finance, pricing services, indices and industry research.

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The company was founded in 2014 by Pascal Gauthier, now the CEO of cryptocurrency hardware firm Ledger, before being bought by Soubiran, a former HSBC banker.

Though it doesn't have direct exposure to the whims of token pricing, Kaiko has not been immune to the industry's troubles as US$2 trillion was wiped off the market's value.

Several prominent crypto companies, lenders and hedge funds, once flush with cash and accolades at the peak of the market, have cut costs, laid off staff and bordered on insolvency as prices plunged and liquidity dissipated. Investors have become overly wary as a result, Soubiran said, keen to ensure their bets can withstand a potentially lengthy bear market.

"Building the narrative around the series B pitch was not the hardest part," Soubiran said. "The hardest part was getting the whole thing across the finish line in the middle of a minus 80 per cent downturn."  

Controlling costs

Soubiran said the crypto meltdown has been a boon for Kaiko's business, as customers clamour for information about why prices are crashing. She pointed to a sharp jump in leads for new clients since the current crisis started.

Alston Zecha, a partner at Eight Roads who oversaw its investment in Kaiko, said crypto has matured a great deal in the 7 years since he first presented an overview of the industry to colleagues and senior executives at Fidelity International, to which the fund is affiliated.

"When you speak to most VCs, yes, they are potentially slowing down their pace of deployment, but they're not saying 'no' for really promising companies," Zecha said in an interview. "The phrase that VCs use is the bar is higher."

Soubiran said she plans to take "a much closer look at our path to profitability" in the coming months, including controlling spending as much as possible. Kaiko, however, remains in the market for a chief financial officer among other senior roles and will use the funding to expand its workforce of roughly 60 employees across offices in London, Paris, Singapore and New York. BLOOMBERG