Our perspective

Fireblocks: The Gatekeeper Unlocking Institutional Access to Crypto

By David Lawee and Chengpeng Mou
28 Jan 2022

Founded in 2018, Fireblocks provides software and APIs for hundreds of businesses to custody digital and crypto assets, access DeFi, mint & burn tokens, and manage their treasury operations. We are excited to support Fireblocks and partner with co-founder and CEO Michael Shaulov and his extraordinary team.

This past November, we were thrilled to announce our investment in Digital Currency Group, marking our firm’s first ever crypto investment. Though we’d been closely following crypto and Web3 growth for years, 2021 was when the crypto industry reached an inflection point, bursting into the mainstream with hyperscale levels of innovation and adoption parallel to what we saw with Web 1.0 back in the late 1990’s.

As bullish as we were on the burgeoning crypto sector just a few months ago, we’re even more so now. Institutional participation in the sector has skyrocketed, with crypto-native trading firms, B2C platforms and traditional financial institutions all entering the sector. In the meantime, use cases have expanded from trading and storing crypto to using Decentralized Finance (DeFi), participating in NFTs, using stablecoins as payment rails, and so much more.

Fireblocks is well-positioned to win the institutional custody market

The entrance point for any individual to the world of Web3 is a crypto wallet. For institutions, that first step is custody, which enables the secure storage and transfer of digital assets. We believe that eventually every major institution in the world–from the Fortune 1000 to small businesses and even nonprofits–will interact with Web3. Plug-and-play custody solutions will be their mission-critical gateway to this multi-trillion-dollar market.

Fireblocks has emerged as the winner in the institutional custody market, thanks to their differentiated strategy of being infrastructure-only, security-first, and product-oriented. As a result, Fireblocks has created the industry’s largest over-the-counter crypto settlement network. Through its API-based infrastructure and growing network of trading parties, Fireblocks is strategically placed to expand deeper into DeFi, trade settlement, lending, tokenization and potentially a host of other exciting new digital assets businesses. We believe that the company, under co-founder and CEO Michael Shaulov’s strong and steady leadership, will substantially grow its competitive lead over time.

CapitalG’s Investment in Fireblocks

We first met Fireblocks Michael Shaulov in 2020, when the company was still mostly providing crypto storage for small trading firms. Michael impressed us from the beginning, and we continued to build the relationship with him, including spending two memorable days together at the DCG summit in Atlanta in 2021. Michael is both the kind of leader the crypto sector needs and also the kind we always seek to back: strategic, humble, brilliant and long-term oriented.

We’re thrilled to welcome Fireblocks as CapitalG’s second investment in the crypto space–and we are excited to partner with more extraordinary crypto entrepreneurs in the years to come.

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