Insuring digital or crypto coin assets is a risky business, as the recent events surrounding FTX have highlighted. Last week Larry Fink, CEO at Blackrock said he didn’t think that most crypto companies had a long term future. As governments and the WEF move to install globally linked digital currencies to replace cash long term, he might be right. But still, there are investors willing to bet big on the demand for crypto insurance rising rapidly, as Evertas annonces a successful funding round. Here’s the word;
Evertas, the world’s first and leading crypto insurance company, announced the successful closure of a series A financing round. Led by Polychain Capital, the round raised $14 million. That, in addition to $5.8 million seed financing, puts the company’s total outside investment at $19.8 million. Evertas intends to use the proceeds of the round to expand underwriting capacity, add key personnel and further develop proprietary enabling technologies and standards.
Other participants in the round include SinoGlobal Capital, CMT Digital Ventures, Foundation Capital, Morgan Creek, Bloccelerate, Matrixport, and Hashkey. Individual investors include Balaji Srinivasan, Andrew Keys, Colleen Sullivan, Tom Howard, Patrick McDonald and David Roebuck.
“2022 has been a very important year for Evertas,” said CEO and Founder J. Gdanski. “It started with our gaining Lloyd’s of London coverholder status and is ending with a substantial vote of confidence by some of the smartest investors in the Web3 world. We will be working overtime to be worthy of that confidence.”
As a Lloyd’s coverholder, Evertas can write and service policies insuring custodial cryptoassets and blockchain infrastructure.
“An investment in Evertas is more than just an investment in a Web3 startup. It’s truly an investment in the entire Web3 space,” said co-Founder and President Raymond Zenkich. “That’s because the enormous cryptoasset insurance gap has impeded, and continues to impede, broad-based blockchain technology adoption. In empowering Evertas, these investors are empowering the entire crypto ecosystem.”
Zenkich added that currently, less than 3% of digital assets are thought to be insured against theft or loss, leaving the market dangerously exposed.
BUMPS IN THE ROAD?
The timing of the round is notable for how it coincides with the extreme tumult generated by the failure of FTX and other crypto custodians. These high-profile events have highlighted the need for, and sparked tremendous interest in, risk transfer products for crypto and blockchain infrastructure. They have also underscored the challenges generated by the extreme lack of insurance capacity afflicting the market.
“Regulation-by-insurance is the most cryptonative, free market way to ensure custodians and exchanges implement proper governance and risk controls,” said investor Tom Howard. “When a user sees ‘Insured by Evertas’ they know that a high standard is certified by knowledgeable folks with skin in the game.”
Other participants in the round had the following to say about their decision to invest in Evertas:
Polychain Capital Founder and CEO Olaf Carlson-Wee: “The crypto industry currently lacks insurance products and Evertas is well-suited to help fill that gap, which is one of the many reasons we’re excited to partner with them. The founders are cryptonatives who have a deep understanding of both crypto-asset security and insurance, and are building the right tools, relationships, and products to push the next phase of crypto adoption and maturation.”
SinoGlobal Capital CEO and General Partner Matthew Graham: “Blockchain technology is a rapidly growing sector where demand for insurance on crypto assets dramatically outstrips supply and will likely continue to do so long term. Evertas is the first and so far, only player to achieve Lloyd’s of London coverholder status and the regulatory approval required to directly write policies on the broadest range of crypto asset and platform types. The Evertas team is uniquely qualified to meet the economic and technical challenges inherent to insuring this exciting and ever-evolving new asset class. We have a strong conviction that Evertas will take a commanding lead in the institutional and retail crypto insurance product market.”
Patrick McDonald: “Evertas caught our interest because we believe they have a fundamental market advantage for digital asset insurance. Evertas is currently the only cryptoasset insurance provider that can fully meet the risk transfer needs of the market. They have the only purpose-built crypto policy form, the only comprehensive and scalable underwriting, the only claims team, and they make policy coverage simple for their clients and customers. that’s why I’m betting on Evertas.”
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