Celsius Network, a global crypto earning and borrowing platform, has announced that it has raised a new round of funding for $400 million, with the round led by WestCap, a growth equity firm, and Caisse de dépôt et placement du Québec (CDPQ), a global investment group.
The funding shared from CDPQ, a Canadian investments firm, is the firm’s first foray into the crypto industry, despite already having over $400 billion in investments for other financial technology companies. This latest investment positions CDPQ’s assets for further diversification in the traditional financial sector, alongside a further inroad to the financial technology sector.
“We consider this an appropriate time to invest in this new asset class by adopting a thoughtful approach and working with our partners towards regulation of the industry,” shares Alexandre Synnett, executive VP and chief technology officer at CDPQ.
The new round of funding brings Celsius Network’s valuation to $3.25 billion, jumping by 2,542.3% from a pre-money valuation of $123 million. Celsius has previously raised some $22 million off of a community-led funding initiative, coupled with a $37 million initial coin offering for its native token, $CEL. Celsius Network currently has roughly 1.1 million users, up by 495% from just 185,000 a year ago.
“To cross the divide and place some bets on this new asset class is an extremely (rare) thing you don’t see from major institutions. They understand this better than others and are moving in faster than people you would say would be fast movers. They saw the opportunity and decided to lead the round with WestCap,” shared Celsius Network CEO Alex Mashinsky.
This new funding for Celsius Network comes at a contentious point given the current regulatory climate in the U.S., with the firm itself being served a cease and desist order by the Kentucky Department of Financial Institutions, with follow-up bans from Texas, Alabama, and New Jersey.
Celsius claims that if they were indeed culpable, the new funding round raising fresh capital would show its commitment to the Celsius community, as well as to regulators. This means that, going forward, Celsius will continue to offer yield gains on assets for the long-term.
“Our users want to feel comfortable, especially with the recent regulatory scrutiny, they want to see the company is well capitalized and that we can raise money. And the regulators are concerned about users and also want to see if the company is well capitalized,” Mashinsky claims.
The allegations as described on the cease and desist order from the states charging Celsius Network are based on the contention that the company’s yield-growing accounts for users were actively selling and offering unregistered securities.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.