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BFD Expert Voices - Private Credit

BFD Expert Voices

Once a notorious cryptocurrency critic, Citadel CEO Ken Griffin is coming around to accepting its value, if only reluctantly, Ryan writes from the Milken Conference.

Why it matters: Citadel has capitalized on retail stock trading through its ties with Robinhood but has fallen behind some of its peers in the crypto space.

The latest: In an interview with Bloomberg's Erik Schatzker, Griffin said he is living with the reality that "an asset is worth what people perceive it to be worth."

He likened crypto's value to that of his abstract art collection. "Why is a painting worth $10 million? It's oil on a canvas. So value is in the eye of the beholder. "

But there's a more practical reason for his turnaround: “We help people create portfolios that they think create the greatest value for them. Given the institutional interest in cryptocurrency, it's reasonable to expect to see us be more involved in the crypto space,” he said.

The firm hopes to catch up fast by becoming an institutional market maker, just as soon as it can deliver a product that has a very high standard of KYC and AML to ensure it's not trading with bad actors or rogue nations, Griffin says

Background: More recently, Citadel secured a $1.15 billion minority investment from Sequoia — one of the more active investors in the web3 space — and crypto-focused VC firm Paradigm.

1 big thing: The art of crypto 

Ken Griffin, Founder and CEO, Citadel, speaks during the Milken Institute Global Conference in Beverly Hills, 

Point, a home equity-for-cash company, said it raised $115 million in Series C funding at an undisclosed valuation.

Why it matters: Point targets those who are rich in real estate but poor in cash at a time when the typical home value is up 20.6% to $337,560 as of March 2022.

How it works: Points connects homeowners with investors. The homeowner receives cash from the investor, while the investor gets an equity stake in the home. 

The homeowner has 30 years to buy back the equity. If the house is sold, the investor gets a cut of the proceeds.

Point caps the upside for the investor, and the downside for the homeowner, should the value surge. 

What we're watching: What a regulatory framework around this space could look like. 

"Point has and will continue to proactively reach out to various regulators to introduce this burgeoning asset class and discuss a sound regulatory framework for it," CEO Eddie Lim tells Lucinda.

Looking forward: Point is now in 16 states as well as Washington, D.C. It is planning to go into 11 more regions this year.

Of note: WestCap led the round, joined by a16z, Ribbit Capital and others.

2. The BFD: On Point

Illustration of a lightbulb with a house-shaped filament 

Over the weekend, Bored Ape Yacht Club creator Yuga Labs raked in about $320 million from the sale of its highly anticipated Otherside virtual land sale.

Why it matters: The numbers from the sale alone make this mint a win for Yuga Labs. But it has come at the cost of once again highlighting how far the ecosystem is from true mainstream adoption.

The good numbers: Aside from the $320 million in primary sales via the minting of 55,000 NFTs, hundreds of millions more changed hands in secondary markets.

According to CryptoSlam, over $600 million worth of secondary sales have happened since Otherside was released. 

The not-good numbers: Not only did the land grab take some $157 million worth of ethereum permanently out of the network, it also slowed down Ethereum-related services such as the DeFi exchange, Uniswap.

One user apparently paid $14,216 in transaction fees for two deeds worth about $9,223 as users fought to jump the line by paying more.

As Fintech Business Weekly writer Jason Mikula pointed out on Twitter, "Imagine if on if on Black Friday Visa/Mastercard increased transaction prices by ~31,000% (and charged you even if your transaction failed.)"

The price of apecoin, which was required to buy said deeds, is now down about 37% since early Friday.

Of note: Yuga Labs says it will be refunding those affected by the high gas fees and that it plans to eventually migrate apecoin to its own chain.

Bottom line: The fact that consumers feel strongly enough about Bored Ape Yacht Club to pay astronomical gas fees for a piece of virtual land is a great sign for Yuga Labs. The challenge now is trading in loyalty for true mainstream-ification. 

3. On the Otherside 

Illustration of a landscape in vivid digital colors.

EU dubs Apple Pay anti-competitive (The Verge)

The European Union has accused Apple of anti-competitive behavior, saying it believes the iPhone maker unfairly blocks rivals like PayPal from using contactless technology.

Facing a lawsuit from one of its most well-known customers and allegations that its revenue growth is slowing, one-click checkout company Bolt put out a blog post saying "it's something of a rite of passage in tech."

While it put out other metrics to deny customer loss figures, Bolt did not address the more important revenue number.

Decrypt spins out, valued at $50 million (Axios)

Crypto-focused media organization Decrypt is spinning out of its parent company after raising $10 million in Series A funding, valuing it at $50 million.

SEC nearly doubles crypto and cyber enforcement unit (SEC)

The SEC announced it would add another 20 positions to the unit responsible for crypto- and cyber-related enforcement. The newly dubbed Crypto Assets and Cyber Unit will have 50 positions total.

4. Credit score

Illustration of a Scrabble board with letter tiles spelling "credit."

• Kevin, an account-to-account payments startup, raised $65m in Series A funding. Accel led and was joined by Eurazeo, OTB Ventures, Speedinvest, OpenOcean and Global Paytech Ventures. http://axios.link/w3Wt

• Stake, an Australia-based online trading company, raised an additional $50m in Series A funding. Tiger Global and DST Global Partners led the A. hellostake.com

• Concerto, a credit card co-branding startup, raised $21.5m. Matrix Partners led, and was joined by PayPal Ventures and GoldenTree Asset Management. http://axios.link/Zrpa

• Line, a San Francisco-based inclusive lending fintech, raised $7m in equity financing and $18m in debt. Massive led the round. Other investors included TASC Ventures, Goodwater Capital, SustainVC, Avesta Fund, Strada Education Network, The Josephine Collective, Overtime VC and Techstars. http://axios.link/Z8LJ

• Ownwell, an Austin, Texas-based property tax savings startup, raised $5.75m in seed funding. First Round Capital led, and was joined by Wonder Ventures, Founder Collective, Long Journey Ventures and Scott Banister. www.ownwell.com

• Truist Financial (NYSE: TFC) acquired Long Game, a San Francisco-based maker of a gamified finance mobile app. Vestigo Ventures and Collaborative Fund backed Long Game. http://axios.link/0K8s

• HOF Capital, which invests in areas including fintech, raised $300m for its most recent fund. http://axios.link/vHnG

• Hetz Ventures closed its third fund with $123m. The seed-stage VC will invest in categories including fintech. http://axios.link/eqnI

5. Deals of the day

• QED Investors hired Victoria Zuo as a principal based in San Francisco, focused on early-stage fintech and commerce businesses.

• MoneyGram COO Hilary Jackson stepped down roughly a year after joining the business.

• Christine Sandler, a former executive at the crypto division of asset manager Fidelity, joined Walden Bridge Capital as general partner. http://axios.link/QSQA

• Crypto.com hired Roeland Van der Stappen, Visa's head of regulatory affairs for Europe, as VP of policy and engagement for Europe, the Middle East and Africa. http://axios.link/fGOr

7. It's personnel

8. Memes and mumbles

CEO of healthtech company saying he dreamt his company had turned into a crypto one—and it was a nightmare.

Situational awareness: Join us today at 12:30pm ET for a virtual event focused on the future of crypto adoption. Guests include Sen. Cynthia Lummis (R-Wyo.) and Haun Ventures chief policy officer Tomicah Tillemann. Register here. 

May 03, 2022

1 big thing: The art of crypto