Gauntlet, a crypto-focused financial modelling platform, has seen its valuation hit unicorn status after raising $23.8 million in a Series B funding round led by Ribbit Capital, a Palo Alto-based venture capital firm. Gauntlet is one of many cryptocurrency analytics firms that have been able to raise funds as demand for these firms increases.
According to Bloomberg, the investment round also saw participation from existing investors such as Paradigm and Polychain Capital. Gauntlet explained that the funding will be used to hire additional workers and expand into new industry verticals, including gaming.
Gauntlet was founded in 2018 by Tarun Chitra, a Wall Street executive who previously worked at multinational hedge fund D.E. Shaw. The firm provides financial modelling and simulation tools to the cryptocurrency industry, with a focus on capital efficiency and risk.
What you should know
- In 2018, Gauntlet received its first seed investment from Coinbase Ventures and five other participants to the tune of $2.9 million, according to Crunchbase. The company raised an additional $4.4 million two years later.
- Gauntlet’s $1 billion valuation reflects the rapid growth of the cryptocurrency industry over the past two years. As Bloomberg explained, Gauntlet’s main product allows cryptocurrency projects and specifically decentralized finance (DeFi) platforms, to run stress tests that can help them set optimal lending and collateral levels. To achieve this, the platform runs algorithms using data from cryptocurrency exchanges.
- There has been an increase in demand for crypto analytics firms like Gauntlet. Last month, Dune Analytics reached unicorn status after raising a $69.4 million round led by Coatue. Another blockchain-analytics firm, Nansen, raised $75 million in December from investors including Accel, GIC and Andreessen Horowitz.
- The demand for analytics firms such as Gauntlet also comes with the rise of DeFi, a sector in the cryptocurrency space where investors sometimes can find double-digit interest rates by just staking on the respective platforms.
Gauntlet’s most notable clients are Aave (AAVE) and Compound (COMP), which are two of the largest DeFi projects based on market capitalization and total value locked as of the time of this writing. The companies each pay Gauntlet more than $5 million a year, according to their voting disclosures.
Companies in the crypto and blockchain industries have attracted significant venture capital since early 2021, leading to several “unicorns” being crowned. In the startup community, a unicorn is a company that achieves a valuation of at least $1 billion. Over a dozen such unicorns have been crowned over the past 12 months.
