You’d be hard-pressed to find a team at Rockaway Capital growing faster than the one behind the Rockaway Blockchain Fund (RBF). In this instalment of our Humans of Rockaway series, its investment manager, David…
Nine months after its launch, the Rockaway Blockchain Fund has collected almost half of its $ 100 million target for investments, its portfolio is reporting excellent appreciation of over 500 percent, and it is now announcing three more investments – innovative bank BCB Group, SIREN Markets, which is building a blockchain exchange for options trading, and Blockdeamon, which is building smart infrastructure for most large blockchain projects.
The Rockaway Blockchain Fund, which focuses on investing into blockchain technologies and decentralized finance (DeFi) and has set a goal of investing $ 100 million (more than CZK 2 billion) over the next four years into promising startups that will change the way we manage our finances, is now announcing three more important investments.
The BCB Group, headquartered in Great Britain, aims to usher in a corporate finance revolution by creating a modern bank that isn’t afraid of blockchain. During the current investment round it obtained a total of $ 4.5 million from investors such as North Island Ventures, Blockchain.com Ventures, Pantera, or the Rockaway Blockchain Fund.
“Corporate customers using blockchain technology are bucking a strong headwind from traditional banks, which are taking a very conservative approach to blockchain and are often afraid to open bank accounts for even reputable clients who are involved in digital assets. BCB Group, on the contrary, welcomes these customers with open arms and aims to become the largest European bank focused on clients in the area of digital assets. It is already evident that founder and CEO Oliver von Landsberg-Sadie has leveraged the experience he gained at bans such as Lloyds, Barclays, and Merill Lynch,” explains Viktor Fischer, Managing Partner of the Rockaway Blockchain Fund.
The BCB Group recorded roughly 19-fold growth over the past 12 months, and in February 2021 processed transactions worth more than $ 4 billion. According to its CEO, Oliver von Landsberg-Sadie, though the company did not need additional investments due to its profitability, it intends to use the new funds for expansion, primarily in Switzerland and Singapore.
“We want more regulatory licenses in the U.K., EU and Switzerland. These are expensive, not just from a working capital point of view in terms of funding staff. But there’s also a regulatory capital aspect. Where our licenses become more bank-like, we have to hold more capital on the balance sheet in reserve,” said Landsberg-Sadie.
SIREN Markets is building a decentralized blockchain exchange for options trading on Ethereum, which – although it runs in the still-young DeFi ecosystem – would be as accessible and functional for users as its tried and tested equivalents in the world of traditional finance. In contrast to traditional options exchanges, where only Bitcoin and Ethereum contracts are traded, Siren plans to allow trading of contracts for even much less popular digital assets.
“Creating a successful exchange for trading options contracts is much more demanding that creating an exchange for trading stocks. The reason is fragmentation of liquidity across various option exercise prices and expiry dates. That’s why there is an active options market for less than 45 % of US stocks, and options are traditionally issued for only popular stocks and indexes. Siren addresses this problem in an elegant manner, through liquidity aggregation, and thus allows trading in options for even less popular underlying assets. The innovative method introduced by technically-oriented founders therefore significantly broadens the potential of the entire market for options contracts,” says Fischer.
In the current investment round, SIREN Markets obtained $ 4 million, with financing being jointly led by 1kx and Spartan Group, and with other investors including the Rockaway Blockchain Fund.
The start-up plans to use capital gained in this round for a security audit and to grow its team so that it can successfully fulfil its ambitious plans for this year. These include, for example, the ability to trade crypto-currencies such as SUSHI, UNI, or YFI, which other platforms do not currently support.
SIREN Markets supports wBTC and SUSHI. It is now operating in a beta version with more than $ 14 million in total value locked in its liquidity funds, with full production operation planned for March 2021.
The third investment is headed for Brooklyn, where four-year-old start-up Blockdeamon resides. It focuses on building a robust blockchain validator infrastructure, which serves as an intermediate layer between developers and institutions for all key blockchain networks. Blockdeamon allows its customers to easily deploy and manage validators. The Blockdeamon solution is fully portable, so there is no need to worry about perfect network configuration from day one. In addition, the start-up provides intensive support for the blockchain developer environment, and hence enjoys a very good reputation in the community.
“A recent acquisition in the blockchain infrastructure sector (Coinbase acquired Bison Trails) showed that institutions have great interest in similar services. Blockdeamon is now the largest independent infrastructure provider in the sector, and our partnership with its founder, Konstantin Richter, will definitely also benefit other companies in the Rockaway Blockchain Fund portfolio, such as Agoric, Terra, or Vega.” adds Fischer.
The Rockaway Blockchain Fund invests in tools that use blockchain to innovate the infrastructure of traditional financial services, be they fast payments or decentralized securities exchanges. The fund itself was only launched in June of last year, and today its portfolio contains more than 20 projects and dozens more are in the works. The current rate of return on its portfolio is more than 500 percent.