Lending platform Celsius raises $400m in funding round

Celsius Network has raised more than $400m in a funding round led by growth equity firm WestCap amid a period of uncertainty and regulatory pressure for the earning and borrowing platform.

Proceeds from the fundraising will be used to expand Celsius’ existing array of services and products alongside helping to “build bridges between traditional finance and cryptocurrencies”.

Celsius says that a “specific emphasis” is being placed on launching “institutional-grade products and offerings” – signalling that the firm is expanding its target audience to the relatively untapped institutional sector.

A portion of the funds will also be used to double its team from 486 employees to nearly 1,000 and to increase its global expansion efforts through more “strategic acquisitions”.

The fund-raise  – which now bolsters the total valuation of Celsius to more than $3b – comes at a time when Celsius has faced mounting pressure from US-based regulators who remain sceptical of the platform’s products.

In September, Celsius – which is based in New Jersey – was ordered by regulators in the state to cease offering Earn Rewards accounts as of November 1 2021.

Additionally, regulatory agencies in Alabama, Kentucky and Texas all announced similar cease-and-desist actions against Celsius regarding its flagship ‘Earn Rewards’ program. Each state has classified the product as an “offering of unregistered securities”.

Despite the increasing oversight faced by Celsius, it hasn’t stopped the lending platform from achieving record 2021 growth.

Celsius reported the total assets on its platform have now crossed the $25 billion threshold, with more than a million customers registered on the platform. Additionally, more than $850 million in interest has now been earned through its Earn product in just over three years.

Alex Mashinsky, CEO of Celsius Network, spoke positively about the fundraise and highlighted how the capital will be used to better bridge the gap to traditional finance.

“We are pleased by the response we received from many leading financial investors during this fundraise,” he said.

“The partnership with WestCap and CDPQ puts Celsius in a position to grow and further its mission to leverage blockchain technology to connect and decentralise traditional finance.”