Silicon Valley-based Sfox has raised nearly $23 million in a Series A funding round in which Airbnb co-founder Nathan Blecharczyk participated.
Tribe Capital and Social capital co-founder and partner Arjun Sethi led the new investment. Y Combinator, Khosla Ventures, Digital Currency Group and Blockchain Capital were also involved.
The startup aims to help investors carry out large trades by routing their orders to multiple locations in a faster and less expensive way. Sfox’s objective is to provide services to “large-scale investors such as funds, family offices, and high-net-worth individuals.” It claims it has more than $9 billion in transaction volumes to date.
Sethi explains that for bigger investors to “trade from a single account and buy and sell high volumes without impacting prices is exactly what institutional investors looking to embrace cryptocurrencies need as the ecosystem becomes more fragmented”.
Funding for expansion
The newly raised funds will help it add cryptocurrency pairs, improve trading liquidity, and expand into “new geographical regions”. Airbnb software engineer Akbar Thobhani is Sfox’s CEO; he co-founded the company in 2014 with George Melica, a software engineer who developed trading platforms for asset management firm Nuveen.
Thobhani notes that the crypto trading sector is highly fragmented, an issue Sfox solves by providing a single point of access for institutional investors, such as hedge funds and family operations that move large amounts of money.
Stealth to avoid a crash
By enabling stealth orders from customers, Sfox also solves the issue of massive sales causing a price crash as currently happens when trading on an exchange like Coinbase or Binance. Sfox has developed “secret” algorithms that help to hide a large trade until it is executed, thus preventing the market from cratering.
The company has also hired David Gutierrez as its Chief Compliance Officer. Gutierrez previously worked for Capital Group, an investment management firm with $1.7 trillion in assets.