The crypto celebration fuels more avenues in the market. FireBlocks, which completed a $ 30 million round last November alone, raised an additional $ 133 million in Round C. The investment was led by Coatue, Ribbit and was attended by existing investors. Paradigm, Galaxy Digital, Swisscom Ventures, Tenaya Capital and Cyberstarts Ventures. The Fireblocks did not provide the value at which the recruitment was made.
Read more in Calcalist:
Fairblocks, which develops a secure infrastructure for cryptographic asset transfers between organizations, did not disclose the value at which the raising was made.
The company was founded in 2018 by CEO Michael Shaulov, who founded Lacoon Mobile Security, which was sold to Check Point about six years ago for $ 100 million. P. Pavel Berngolz who served as VP of Safend.
The company has an R&D center in Tel Aviv and offices in New York, Hong Kong and Singapore. “We have 230 clients from two people with a dog in the garage who manage hedge fund “And until big fintech companies like Revolut and the Bank of New York Hotel,” Shaulov told Calcalist.
Insurance coverage of up to $ 30 million worth of assets
In Firebox, they have developed a secure infrastructure for the transfer, storage and issuance of digital assets, which includes a response to two burning needs in the market: security of digital wallets and security of transfers over blockchain networks. The company offers a digital wallet and is known mainly thanks to the Fairblocks network they developed, which serves as a kind of crypto market version of Swift. The network has all the company’s customers and large crypto exchanges, and its purpose is to ensure that those on board have a safe transfer of entrants from one customer to another.
Distributed blockchain networks pose a challenge to users. While the assets themselves are cryptographically secure, the tools that support this market – wallets that store them and other tools that help move them – are not. Therefore the field suffers from many thefts and mistakes, uninsured and irreparable events.
Firebox assures users of the transfer network of the property to any other customer who is on security and even insurance coverage of up to $ 30 million in property value if the transfer did not occur as required. “If you look at the blockchain as a technology that should replace the traditional financial world, you need to create a method that will ensure that millions of transactions that are supposed to take place in a day are completed properly, and that the asset gets exactly where you want it to go,” says Shaulov.
“Move fast and not break things”
The platform, which was launched only in June 2019, is already responsible for 5% -7% of all network transfers in the crypto market. Last February, $ 105 billion worth of assets passed through it. The company’s business model is based on subscriptions that give users the volume of transfers depending on the type of subscription, and the collection of transfer fees if there is a deviation in the terms of the subscription.
The challenge facing Fireblocks, like most platform companies, is great. The company needs to attract as many customers as possible to the network, in order to establish its necessity in the market for any organizational player who wants to participate in it. Due to this it is always in tension between the need to develop further integrations, offering very competitive prices in the market with an increasing number of players while always maintaining high standards of security.
“The web has become an important tool for the organizational part of this market,” says Shaulov, “it’s a lot of responsibility. Our motto is ‘move fast and not break things’ (the opposite of the iconic version of Facebook ‘move fast and break things’ – etc.). We have a very large inherent tension between moving fast and providing the critical capabilities to our customers and innovating, and on the other hand maintaining high stability and reliability for the benefit of our customers.
“From day one these two things settled down quite well. We did not have to make too many discounts for people and on the other hand we are not pigs. There were companies that took on the same services 10 times our prices. Our model and our price level are very profitable and very stable model. “We find that if we price the product too cheap people do not think it is secure. If people think they are not paying a fair price, they assume we are doing something unreasonable behind their backs,” says Shaulov.
Currently to be able to withstand the intense pressure that exists on the market to innovate and provide solutions for more and more innovations, esoteric and insane as they are from NTF to Defi systems in Firebox ask their customers what they would like them to invest in them. “We review the market every quarter and ask our customers what protocols they would like us to support. We also have some open-ended questions and anyone at the forefront of the field can offer things we haven’t heard of at all,” says Shaulov.
“I guess if we opened the polls from a year ago, there must have been someone there talking about NFT and we probably didn’t address that,” Shaulov says. “We launched our first product for Defi for example in January 2020 and no one cared and no one used it. It was really embarrassing. Within half a year everything was turned upside down, and today more than 50% of our customers use Defi. We do not know Move from today to tomorrow. ” Nevertheless, in order to keep pace with the innovations that the market requires, the company acted to recruit quickly again, in order to significantly increase the development teams.
“The shoemaker goes barefoot”
The big question now facing companies like Fairblocks is the question of regulation. In any other tradable market, a company through which about 5% of the trading volume of assets moves, had to comply with a series of clear and rigid rules and regulations. Both to ensure the protection of the participants in the system on the one hand and to prevent over-centralization that could jeopardize the stability of the market at all.
“We take an active approach with regulators in all the territories we are in (from the US, England, Japan and Singapore – etc.),” explains Shaulov, who admits that regulators are failing to keep up. “Because we are a technology company, the regulators feed off of us where the market is going and in the end we are Self-Regulated. Today most of the regulation in the field concerns actions related tomoney laundering The name of the regulation is on our customers, and there is not so much supervision at the technological level. This is despite the fact that if we were 5% in stock trading we would be heavily supervised. The regulators are simply not there and it is not really clear who the regulator is responsible for it. “
Meanwhile the field is galloping forward. The cryptocurrency market is worth more than a trillion dollars and Bitcoin, the most popular currency of all, is already trading at over $ 60,000 per currency. Israel, of course, lags far behind, although many Israeli companies are leaders in the field, and the Israeli regulator is not yet cooperating. “We have Israeli customers, not many. Israeli banks make it very difficult for Israeli customers to deal with digital assets and cryptocurrencies. The shoemaker goes barefoot, because the leading companies in the field are Israeli companies that provide infrastructure for all global organizations.”