Hack VC, 6th Man Ventures (6MV), Archetype, Blizzard and CMT Digital are among Fractal backers as it expands its institutional product suite
Fractal, an infrastructure provider enabling institutions to clear, settle, and margin digital asset trades on-chain, announced it has secured $6M in financing led by Hack VC. They are joined by a suite of strategic investors including 6th Man Ventures (6MV), Archetype Ventures, Avalanche Ecosystem Fund Blizzard, Circle Ventures, CMT Digital, CoinShares, GoldenTree Asset Management, QCP Capital, Spartan Group, as well as angel investors Akshai Rajendran, Anand Gomes, Josh Frank, Shiliang Tang and Sid Powell. The funding will be used to continue launching institutional-grade products that facilitate capital efficiency, transparency, as well as a simplified user journey.
In the wake of ongoing developments in the CeFi space, institutional interest has intensified in finding fit-for-purpose solutions to facilitate on-chain finance. “We gave Fractal a term sheet the week after the FTX collapse and their team was able to close the round in the 3 weeks following, emphasizing institutional investor confidence. Fractal is well positioned to build the connective tissue and capital efficient solutions between assets on- and off-chain,” said Alex Pack, Managing Partner at Hack VC. “Fractal provides tools that help investors to easily participate in the on-chain economy.”
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“The prior wave of centralized digital asset providers validated the need for institutional grade brokerage products but didn’t allow depositors to properly evaluate risk. Fractal is building on the foundation that structuring products on-chain is the only method to reduce counterparty risk and enable real-time monitoring,” said Carl Vogel, Partner at 6MV. He added, “We are thrilled to partner with such a terrific, experienced founding team to build products that leverage the unique benefits of blockchain to create more secure, trustworthy infrastructure to power the digital asset economy.”
Fractal recently launched in beta with an initial cohort of clients using applications on the Avalanche blockchain, with a view to tightly integrate with Ava Labs’ institutional subnet efforts. “The last year’s events in the cryptocurrency industry as well as today’s current banking environment have taught us that disintermediation, institutionalization, and transparency are greatly needed to build trust in the counterparty risk of different players in the space. Digital asset infrastructure evolved from centralized exchanges and over-the-counter (OTC) dealers to Centralized Finance (CeFi) prime brokers that simplified price discovery,” said Aya Kantorovich and Alexandre Elkrief, Fractal Co-Founders and Co-CEOs. “The next generation of digital asset infrastructure needs to enable transparent proof of reserves, tri-party collateral management and instant on-chain settlements. Our technology will provide just that as we transition to this next phase for the future of on-chain finance.”
“It is challenging to cross collateralize on-chain yield bearing assets, OTC bilateral agreements in a cost efficient way. Fractal solves this by putting it on-chain, which is transparent, and efficient for both sides of the transaction. QCP Capital is pleased to support such a solution that improves capital efficiency and catalyzes the progression of DeFi,” Stan Low, Head of Investments, QCP Capital.
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Fractal was founded by Aya Kantorovich and Alexandre Elkrief. As a former founding team member of FalconX, Aya was responsible for scaling the company’s revenue through their most recent $8B valuation last year and has over five years of experience in the institutional cryptocurrency space. Alexandre previously led DeFi at LedgerPrime, a multi-strategy digital asset investments firm. Prior to that, Alex was the co-founder of Knowhere, a San Francisco based startup that developed machine learning and text understanding models for the media industry. Fractal’s engineering team is composed of early DeFi builders, who developed smart contracts that have collectively processed over one billion in transaction volumes and audited by leading audit firms in the space.
“Well-constructed protocols can make financial infrastructure more resilient, more scalable and cost less than traditional rails. Fractal has the right team and the right vision to expand DeFi towards mainstream institutional adoption,” said Itay Tuchman, CEO of Consello Digital and former Global Head of Foreign Exchange at Citi. With over 20 years of experience in financial markets, Itay supports the Fractal team as a strategic advisor.
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