BlockFi is a fintech startup offering personal loans backed by cryptoassets. The company's flagship product is a standardized loan at a flat interest rate for up to 12 months, at a 35% LTV ratio. As collateral for the loan BlockFi holds a customer's Bitcoin or Ether at a registered custodian. To manage the risk of such a volatile asset class, the firm has triggers at cryptocurrency price drops where the borrower has to put up more collateral or they begin selling the borrowers cryptoasset.
Unlike a traditional lender, BlockFi does not look at FICO or credit scores. They generate revenue via loan interest as well as servicing the loan when they sell it off to other investors. They are growing fast expecting to originate $100M worth of cryptoasset backed loans by end of the year, with more customer demand than they can currently support.
The team is based in New York City and has under 10 employees.
Why I like Them
Blockchain technology and the cryptoasset class it has given rise to, continues to grow as a part of the global financial system. No matter if cryptoassets are a bubble or not, it seems unlikely they will ever go away, with a real possibility they will be part of any well balanced portfolio in the future. BlockFi is helping build out a modern financial system around an emerging asset class. They have huge amounts of growth ahead with their current offering as just a first step, with the team one day hoping to offer lines of credit and a credit card backed by crypto.
Disclosure: I have spoken to members of the team.