Fintech infrastructure startup Prime Trust raises $100M to add IRAs, crypto staking
There's been a massive proliferation of fintech services in the past few years, during which fintech companies competed to develop new products more quickly than their competitors. Nowadays, the race between fintechs has much more to do with consolidation and which companies can build a holistic, "one-stop-shop" by bringing those different products onto one platform.
Crypto custody and fintech infrastructure startup Prime Trust is positioning itself to do just that, and the company has just raised over $100 million in fresh funding to add new products to its existing suite, its CFO Rodrigo Vicuna told TechCrunch. The Las Vegas, Nevada–based company's latest round is a Series B featuring a mix of existing and new investors, including FIS, Fin Capital, Mercato Partners, Kraken Ventures, Commerce Ventures, William Blair & Company, Decasonic, University Growth Fund, Gaingels, GateCap Ventures and Seven Peaks Ventures, the company said.
Prime Trust previously raised $64 million from investors in summer of last year, 5 years after its founding. Since that last fundraise, Vicuna said, Prime Trust has expanded its team in numerous areas, including R&D, product and engineering, sales and compliance, bringing its total headcount to 400 today.
The firm serves around 700 customers, ranging from crypto exchanges, on-ramps, wallet apps, ATSs, RIAs, broker-dealers and banks, according to Vicuna. Prime Trust plans to use the new funds to launch a crypto-focused IRA retirement account as well as wealth management and crypto staking products, he added.
Prime Trust's current suite of offerings can be broken down into three main stacks, Vicuna explained — "onboarding," which comprises compliance and rails; "monetization," which includes functions such as trading and custody; and "liquidity," which he said includes IRAs and trading-related products.
"Most people hop into the onboarding piece first, because it's necessary, right? You need to do AML, KYC BSA compliance, and you need to be able to provide rails in and out of your platform. I would say that was the traditional tip of the spear for the business, and now a lot of folks are saying, hey, cool, that's table stakes; we want this other stuff," Rodrigo said.
In addition to launching new products, the company also plans to enhance its support for tokenized products such as NFTs and to invest in security and scalability improvements, including a new cloud architecture, he added.
"Having support for that entire spectrum of non-fungibility to fungibility is a very core piece of what we do as a core back-end provider to the overall space and being able to support the broader use cases [of blockchain] beyond just any one asset class," Vicuna said.
The crypto infrastructure space is relatively busy, with startups of all stages such as Blockdaemon and Cryptio competing for share. In Vicuna's view, Prime Trust stands out because its suite of products is "much broader," a benefit to the company's institutional clients that can pick and choose which aspects of the platform they want to leverage.
While it's been a tough fundraising environment for crypto startups these past couple of months, Vicuna said Prime Trust's latest round was oversubscribed. He said he sees the investor interest as reflective of the company's status as a "picks-and-shovels" player providing the sort of underlying technology many fintech and crypto companies rely on to grow.
"We had both the benefit of planning early, but also being in the right place at the right time," Vicuna said.
"We're really a bet on adoption. Taking a step back, I think, has the macro market impacted the investment world? It has, yeah. Was it difficult for us to raise? Not really . . . People were really excited about the core back-end infrastructure of the market. They want to make that bet on adoption, and they believe despite volatility, it'll be up and to the right."