Crypto startup Babel Finance turns unicorn in US$80 million round

BABEL Finance said it has closed a US$80 million Series B round that values it at US$2 billion pre-money, signalling the continuation of funding momentum for Web3 companies even as the crypto space faces a reckoning.

Jeneration Capital and 10T Holdings were the main investors in the round, alongside existing shareholders Dragonfly Capital and BAI Capital. Other investors include Circle Ventures and family offices in Asia-Pacific.

Hong Kong-based Babel Finance does crypto lending and trading. It focuses on institutional clients including crypto-native institutions, traditional financial institutions such as banks and investment funds, and ultra-high-net-worth investors and family offices.

Last September, the startup opened a business headquarters in Singapore and said it was planning to apply for regulatory licences in the city-state. It appointed ex-banker Shanshan Yu as CEO of the new entity called Babel Asia, which will target global mainstream investors.

“Regulators in Singapore are known for being tough on money laundering, so being fully compliant in this market will further the appeal of crypto assets among traditional investors,” co-founder Flex Yang said then.

Babel Finance said it limits its business to Bitcoin, Ethereum and stablecoins, and serves a select clientele of about 500 customers.

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The company said on Wednesday (May 25) it had an outstanding loan balance of more than US$3 billion as at end-2021, average monthly trading volume of US$800 million in derivatives, and had structured and traded more than US$20 billion in options products.

Babel Finance’s team has grown from around 50 people to over 170 staff in the past year. In May last year, it announced a Series A fundraise of US$40 million from investors including Sequoia Capital China and Tiger Global.

The startup said it has applied for licences in Hong Kong, Luxembourg and the UK.

Co-founder and CEO Del Wang said: "The crypto financial market is full of opportunities and hidden risks. From the perspective of short-term profits, the retail market and Altcoins (cryptocurrencies other than Bitcoin) may have higher profit margins, but we pay more attention to the long-term development of the industry and aim to lead in institutional financial services and innovation.”