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BFD Expert Voices - Private Credit

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Data: S&P Capital IQ; Chart: Axios Visuals

Valued as high as C$5.2 billion ($4 billion) a year ago, Voyager Digital's valuation has evaporated following the collapse of crypto hedge fund Three Arrows Capital and a broader digital asset rout.

Why it matters: The spectacular rise and fall of Voyager's stock is indicative of the crypto ecosystem as a whole and a warning of more bankruptcies to come.

State of play: As part of its bankruptcy filing, Voyager said customers would receive some combination of crypto and common shares in the newly reorganized company — but the value of those shares is in doubt.

The crypto lender is now valued at C$64.2 million ($49.4 million) — less than 1/80th of its highest market capitalization, in 2021.

Meanwhile, the Investment Industry Regulatory Organization of Canada halted trading of Voyager shares following the Chapter 11 filing, and the Toronto Stock Exchange is expediting a review for a potential delisting of the stock.

Between the lines: Investors aren't the only ones who could see their funds wiped out by the firm's bankruptcy.

A statement from Voyager partner Metropolitan Commercial Bank said client funds were not FDIC-insured in the case of the firm's failure, despite Voyager's previous assurances.

1 big thing: Voyager's share collapse 

Although it's been reported that Authentic Brand Group got less than 5% of Bolt’s shares as part of the settlement of its lawsuit against the one-click checkout company, two sources tell Lucinda the figure is even lower  — less than 1%.

Why it matters: That seemingly small 4-point difference equates to several hundred million dollars in paper value.

Details: In its lawsuit, ABG said it had hit performance metrics in its partnership with Bolt that gave it the right to acquire 5% of Bolt — a stake worth upward of $500 million — for $29 million.

At less than 1%, the settlement gives ABG a stake currently worth less than $100 million.

Background: Depending on the exact size of the stake, it could still be significant for ABG. In 2020 (the last year it disclosed figures) posted revenue of $488.9 million and net income of $225.3 million.

Bottom line: ABG taking shares in Bolt as part of the settlement is still a relative vote of confidence for the startup when its business model is not exactly in vogue. Whether other investors share ABG's confidence is a different story.

2. The BFD: Dissecting Bolt's ABG settlement

Illustration of two people shaking hands on a giant stack of money. 

FTX has "a few billion" to support industry, CEO says (Reuters)

Sam Bankman-Fried told Reuters FTX could help shore up more struggling crypto firms to prevent further destabilization, but he believes the worst of the liquidity crunch has passed.

The troubled lender has been paying back debts to major DeFi protocol Maker, probably to recoup bitcoin-equivalent tokens held as collateral.

Genesis confirms exposure to Three Arrows Capital (Bloomberg)

The crypto lender sold collateral and hedged its downside once Three Arrows failed to meet a margin call, Michael Moro, chief executive officer of Genesis, said in a series of tweets Wednesday.  

3. Credit score

Illustration of a credit score meter with emoji faces showing sad, neutral, and happy emotions.

• YuLife, a London-based life insurance startup focused on wellness, raised $120m in Series C funding at an $800m valuation. Japan’s Dai-ichi Life Insurance Co. led, and was joined by insiders Creandum, LocalGlobe, Target Global, Latitude, Anthemis, OurCrowd, Notion, MMC and Eurazeo. http://axios.link/UwfE 

• Rubix, a “green” Layer 1 blockchain startup, received a $100m investment from LDA Capital. http://axios.link/TXlC 

• UnDosTres, a Mexico City-based digital payments company, raised $30m in Series B funding. IDC Ventures led and was joined by Telegraph Hill Capital, AI8 Ventures and Benber LP, and existing investors IGNIA and Dalus Capita. http://axios.link/r1aY

• Lucinity, a banking compliance startup, raised a $17m Series B round led by Keen Venture Partners, with participation from Experian, Crowberry Capital, Karma Ventures and byFounders. www.lucinity.com

• Griffin, a London-based banking-as-a-service startup, raised £12.5m. Notion Capital led, and it was joined by EQT Ventures. www.griffin.sh 

• HomeLister, a Santa Monica, Calif.-based online home selling platform, raised $10m in Series A funding co-led by M13 and Homebrew. www.homelister.com 

• Ondo Finance, a decentralized finance startup, raised $10m in a public token sale. http://axios.link/6Xbn

• Thalex, a crypto derivatives exchange, raised €7.5m in Series A funding from Bitfinex, Bitstamp, Flow Traders, IMC, QCP and Wintermute. www.thalex.com

• Tenderize, a staking derivatives protocol, raised $3m in seed funding led by Eden Block, with participation from Figment, Daedalus and TRGC. http://axios.link/I8jA 

• OpenFin, a bank technology provider, secured a strategic investment from ING Ventures. Terms were not disclosed. http://axios.link/lFuD 

• Piper Sandler (NYSE: PIPR) agreed to buy SF-based tech investment bank DBO Partners. http://axios.link/3nwY 

4. Deals of the day

• Crypto exchange Binance.US hired finance exec Jasmine Lee as its CFO. She previously was CFO and COO of Acorns. http://axios.link/CLgH

• Brazilian neobank Neon hired former Coinbase director of engineering André Madeira as its new CTO. http://axios.link/wtJm

• Embattled online mortgage lender Better.com has made a string of executive hires, including bringing on former LendingTree CPO  Sushil Sharma as its first chief growth officer and Casper sales exec Steve Riddell as its new head of sales. http://axios.link/EvfM

• Crypto lender Celsius Network added XOUT Capital founder and CEO David Barse and Drivetrain CEO Alan Jeffrey Carr to its board of directors. http://axios.link/0TjN

5. It's personnel

Situational awareness: Investments in U.S. tech startups fell 23% over the last three months, to $62.3 billion, according to PitchBook, representing the steepest decline in three years.

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July 07, 2022

1 big thing: Voyager's share collapse