Goldman Sachs and Barclays Bank invest in Alan Howard’s crypto platform

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Goldman Sachs and Barclays have invested in Elwood Technologies, the cryptocurrency trading platform founded by British hedge fund billionaire Alan Howard, in a new bet on the widespread adoption of digital assets.

The two banks invested alongside venture capital firms Dawn Capital and venture capital divisions of German lender Commerzbank and Galaxy Digital, the crypto financial group of US billionaire Mike Novogratz. The round, Elwood’s first outside fundraiser, valued the six-year-old company at around $500 million, according to people familiar with the terms.

Elwood is counting on traditional financial institutions — from hedge funds to banks and family offices — pumping more money into digital assets despite the sharp decline in crypto asset prices. According to CryptoCompare data compiled by the Financial Times. Bitcoin fell below $30,000 on Tuesday for the first time since July.

Elwood’s funding round was agreed ahead of the latest weekly drop. Founded as a vehicle to manage Howard’s personal crypto fortune, the company provides market data and trading infrastructure to large investors in digital assets.

Chief Executive James Stickland shrugged off the drop and called the fundraiser “another validation of crypto’s longevity.”

“We get investments from financial institutions that don’t expect massive returns in 15 minutes. They invest in infrastructure,” he said. “I think it’s a message of comfort.”

The $70 million fundraise cements a change of direction for Elwood, which as recently as 2019 focused on asset management, planning to offer portfolios of crypto funds to institutional investors. Elwood now sells the technology it developed in-house to manage its own crypto investments to other clients, said Stickland, who joined the company in 2020 to lead its drive to become a software provider.

“As institutional demand for cryptocurrency increases, we are actively expanding our market presence and capabilities to meet client demand,” said Mathew McDermott, global head of digital assets at Goldman Sachs. He added that the investment showed the US bank’s “continued commitment” to digital assets.

Elwood provides a technology platform similar to Bloomberg Terminal or BlackRock’s Aladdin portfolio management system, according to Stickland, which aims to connect with existing trading software at financial institutions to help them manage and trade their crypto portfolios. .

In February, the company announced a partnership with Bloomberg to connect its software to the US trading platform’s order management system.

“Unless the infrastructure is there and you don’t feel comfortable with the quality of the underlying architecture, you’ll never really get the volume to match the opportunity,” Stickland said.

Elwood will remain majority-owned by Howard, who had been its main investor prior to the deal. Hedge fund co-founder Brevan Howard is one of the most prominent UK investors to venture into the crypto markets.

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