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June 22, 2021

Tesseract raises $25m to bolster institutional offering

By Verdict Staff

Digital asset lending firm Tesseract raised $25m in its Series A funding to strengthen its institutional digital asset lending offering.

The financing round was led by Augmentum Fintech with participation from venture capital firms including Concentric, Sapphire Ventures, BlackFin Capital Partners, and DN Capital among others.

Wintermute, Coinbase Ventures, and Woorton also subscribed to the round alongside undisclosed local and international investors and strategic angels.

The round was also joined by Icebreaker.vc, which made its first investment in Tesseract in 2018.

Tesseract CEO and founder Yichen Wu, who called the funding a significant milestone for the firm, claimed it is one of the largest Series A investments in Finland to date.

Wu said: “We are humbled to gain new industry-leading investors in technology, finance, and blockchain whose expertise will add significant value beyond the raised funding.”

Tesseract focuses on facilitating institutional capital flows between traditional and digital asset finance.

The core products offered by the firm spans across margin lending, OTC lending, partnerships with retail trading platforms, and decentralised finance.

Its margin lending platform is designed to enhance capital efficiency for institutional clients, including hedge funds and market makers.

Wu added that the new capital will support the development of the firm’s institutional offerings and the hiring of additional resources to develop new and existing partnerships, and innovation in new undisclosed financial products.

He further said: “We will also focus on developing our cross-trading venue margin lending platform, which has seen enormous uptake in the past year.

“Due to the global nature of our fast-moving business, we will also funnel efforts into spearheading our global growth and ensuring regulatory compliance globally.”

Institutional investment in digital assets space is growing, with institutional ownership expected to surge to 30% by 2025 from the current 10%.

Augmentum Fintech partner Martyn Holman said: “Following the separation of custody and trading in the first waves of evolution, Tesseract is addressing the next fundamental need in a space that has limited leverage capabilities.

“Yichen, Ilkka and their exceptional team have already grown a strong and profitable foundation with an outstanding product, a clear vision and a voracious will to win.”

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