Visa Invests in Cryptocurrency Again, Leads $40 Million Round for Anchorage

Bolton Flautt - July 10, 2019

Visa (NYSE: V) took part in the Series B funding round for cryptocurrency startup Anchorage, signaling the big bank’s support for the future of the industry.  Formed in 2017, the money services business provides crypto custody services making it safe for institutions to hold and use digital currencies.  According to Anchorage, venture capital firm Blockchain Capital led the $40 million raise alongside Visa, with existing investors, including Andreessen Horowitz, also participating.

Anchorage says it has built the most secure digital asset custody solution available with its omnimetric blockchain security system. The claim is supported by some of the leading institutional investors in the crypto space, such as Blockchain Capital, Paradigm and 16z crypto, coming onboard as Anchorage clients.

In a Series A round six months ago, Anchorage raised $17 million.  Visa was not a participant in the first round and did not disclose how much it pumped into the $40 million funding.

Anchorage’s valuation was also kept a secret.

Both Anchorage and Visa are founding members of the Facebook cryptocurrency venture dubbed Libra.  Libra has face no shortage of criticism since it was unveiled last month. In testimony on Capitol Hill today, Federal Reserve Chairman Jerome Powell repeatedly fielded questions on possible holes in Libra and the potential fallout if not held under a regulatory microscope.

Not Visa’s First Dance

Visa put its foot in the cryptocurrency startup water in 2015, joining Citigroup (NYSE: C), Capital One (NYSE: COF) and Nasdaq (NASDAQ: NDAQ) with an investment in Chain.  Chain was a provider of enterprise software that served as scaffolding for developers to build on the blockchain, a decentralized immutable public ledger.  The investors poured $30 million into the Series B round that valued Chain at almost $150 million.

That investment apparently worked out quite well.  In September 2018, Chain was acquired by fellow startup Lightyear for a rumored $200 million.  Lightyear is a market leader with an enterprise solution for companies to adopt blockchain technology.  Lightyear’s flagship products include a universal payments network built around the Stellar open financial protocol and a cloud ledger solution branded Sequence.

V Stock Info

Shares of V have been strong in 2019, rising about 36% so far to continue an uptrend that dates back to the end of the financial crisis in 2009.  In Wednesday trading, the stock is up three-quarters of a percent at $179.05 with about 90 minutes left in the trading session after hitting an all-time high of $180.26.

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