Hong Kong crypto player Babel hits $2b valuation
Hong Kong-based Babel Finance, which claims to be the world’s leading wholesale crypto financial services provider, has raised USD 80m in Series B funding at a valuation of USD 2bn.
Investors included Jeneration Capital, 10T Holdings, Dragonfly Capital, Bertelsmann Asia Investments spinout BAI Capital, Circle Ventures, and various family offices in Asia. 10T is a growth equity investor in digital asset ecosystems, while Dragonfly and Circle are specialist investors in global crypto and blockchain.
Babel closed its Series A in May 2021, with Zoo Capital, an early-stage investment arm of Boyu Capital, taking the lead. Additional commitments came from Sequoia Capital China, Dragonfly, BAI Capital and Bertelsmann, and Tiger Global Management. NGC Ventures, ZhenFund, and Lightspeed China Partners made investments of undisclosed sizes in the company in 2018.
Founded in 2018, Babel is involved in crypto lending and trading, focusing on institutional clients, including crypto-native institutions, traditional financial institutions such as banks and investment funds, family offices, and ultra high net worth accredited investors. It claims to have played a key role in the establishment of the crypto financial interest rate market and derivatives trading market.
At the end of 2021, Babel had an outstanding loan balance of more than USD 3bn, average monthly derivatives trading volume of USD 800m, and had structured and traded more than USD 20bn in options products. The company’s client base numbers just 500 and it restricts itself to leading cryptocurrencies Bitcoin, Ethereum, and stablecoins.
Since the Series A, Babel’s team has grown from around 50 people to more than 170. It has opened an office in Singapore and applied for relevant licenses in markets such as Hong Kong, Luxembourg, and the UK. Del Wang, the company’s co-founder and CEO, noted in a statement that as crypto becomes more institutionalised he wants to participate in the creation of rules for the industry.
Jason Tan, CIO at Jeneration, added: "The institutional investor market is in its early stages of participating in the crypto asset class. It requires both commitment to risk management and professionalism to build trust in the ecosystem. Babel Finance is becoming an important node in the crypto ecosystem, enabling existing and new participants to thrive in this flourishing asset class.”
Babel is not alone in targeting the institutional client market out of Hong Kong. In June 2021, crypto financial services provider Amber closed a USD 100m Series B at a valuation of USD 1bn.
Other Hong Kong success stories in the crypto and blockchain space include non-fungible token (NFT) specialist Animoca Brands and cryptocurrency exchange operator FTX, which were valued at USD 5bn and USD 25bn, respectively, in their most recent funding rounds. Around that time, with regulators globally looking to crack down on crypto, FTX relocated from Hong Kong to the Bahamas.
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