London-based institutional crypto asset-trading platform Elwood Technologies has bagged $70 million in Series A funding from Goldman Sachs, Dawn Capital and other investors.
Founded by billionaire hedge fund manager Alan Howard in 2020, Elwood has created a trading platform and API to allow institutional investors access to digital asset markets, including cryptocurrency.
According to Dan Chaplin, VC investor at Dawn Capital, this investment will go towards establishing Elwood as a key part of digital asset trading infrastructure: “Elwood addresses an enormous and largely greenfield market with the potential to become a foundational piece of market infrastructure for crypto as a new asset class.
“Annual crypto trading volumes already hover around $36tn, providing a potential revenue fee pool to Elwood of $25bn in execution fees alone,” he added in a Medium post on the investment round.
See: With $325m Tora buyout, LSEG eyes crypto trading opportunities
Investing in a crypto trading platform, arguably currently looks a safer bet than investing in cryptocurrency or digital assets themselves: the combined market value of all crypto-currencies is $1.12 trillion, about a third of November's aggregate value amid what has been dubbed a "crypto winter”, with Coinbase’s trading volumes down 44% from last quarter.
The Series A comes months after Elwood announced a deal with Bloomberg to integrate Elwood’s systems into the Bloomberg AIM order management system (OMS). This integration will initially “facilitate reconciliation, position and risk management, giving the client a holistic view of their risk and P&L across all their asset classes within AIM” according to an Elwood press release.
Elwood’s pitch is to provide a fully-featured trading interface designed for professional traders – and an API based on the Financial Exchange (FIX) protocol, which allows it to be integrated into existing trading platforms. The platform is integrated with exchanges including Binance and Coinbase, along with liquidity pools and asset custodians.
Elwood systems built on Google Cloud
The platform is built on GCP, with a dedicated instance for Elwood, and individual VPC instances for each execution management system (XMS) customer.
“Elwood was established to meet the needs of institutions seeking to secure exposure to digital assets by providing a robust and transparent platform which delivers the highest standards expected in traditional finance. We have entered a new chapter in Elwood’s journey and continue to expand our capabilities, enabling our institutional clients to provide their users with improved access to digital assets,” said Elwood CEO James Stickland in a press release.
Josh Bell, general partner of Dawn Capital, said in the release: “At Dawn, we continue to seek out first-class infrastructure that will continue to support the rapid evolution of the digital asset market. Our investment in Elwood was a natural fit, given the business’s cutting-edge technology, experienced team and significant market opportunity.
“Now is an important moment in Elwood’s evolution as its technology moves to the mainstream, and we look forward to supporting them to unlock access to the digital asset market for institutions everywhere.”
Other investors in the funding round included Barclays, BlockFi Ventures, Chimera Ventures, CommerzVentures, Digital Currency Group, Flow Traders and Galaxy Digital Ventures.