Cobo, a popular crypto-asset management platform, has raised $40 million in Series B funding. According to reports, the proceeds will primarily be used for the development of DeFi as a service (DFaaS). They will also be used to strengthen the existing digital infrastructure around wallets, trading, and staking.
The aforementioned news comes three years after a $13 million Series A round in October 2018, one that was aimed at expanding operations internationally. The privately-held company is incorporated in Beijing and has offices in Singapore, Hong Kong, and Seattle.
Hence, the latest round of funding will also help the company procure domestic regulatory licenses for anti-money laundering (AML) and counter the financing of terrorism (CFT) compliance.
The previous round was led by China-based DHVC and Wu Capital, which extended to DST Global, A&T Capital, and IMO Ventures this year.
In a statement, CEO and Co-founder Discus Fish welcomed the funding and said,
“With interest in the crypto revolution soaring across Asia, it’s high time to expand blockchain infrastructures to meet the rising demand, especially as we’re seeing growing enthusiasm among institutions.”
There has indeed been a surge in DeFi adoption by institutional investors. A recent survey by Chainalysis also pointed out that large transactions by institutional players accounted for over 60% of all DeFi transactions in Q2 of 2021.
While Curve, Uniswap, and AAVE are different DeFi platforms, Cobo’s DeFi as a service (DFaaS) will target different risk portfolios of institutional clients. The CEO also emphasized that fund management would require professional managers to manage protocol interactions. While low-risk transfers can be automated, high-risk large fund movements will require multi-signature confirmations at various levels, he added.
Owning to the tremendous growth of DeFi, other prominent players are entering the domain too. According to Cardano founder Charles Hoskinson, for instance, new DeFi projects with small development teams are now being valued in billions of dollars.
Matthew Roszak, crypto-investor and co-founder of Vesper, recently estimated that the DeFi sector will reach $800 billion in 2022. He said,
“Right now we’re sitting at a DeFi market cap of about $80 billion. My sense is that a year from now it will add a zero.”
To focus on the DeFi space, Cobo had previously announced that the company has divested its hard wallet service to focus on institutional custodial services. By doing so, the company aims to more than double its revenue to $200 million in 2022.
However, Cobo is not alone to focus on DeFi funds. Earlier last month, Bitwise Asset Management also announced two DeFi Crypto Index Funds to offer Uniswap and Aave investment funds to professional investors.