Hidden Road Partners, a startup prime brokerage with backing from Ken Griffin’s market-making firm Citadel Securities, is looking to raise new funds as the digital assets market rebounds, according to a report by Bloomberg citing unnamed people with knowledge of the matter.
The firm, which specialises in cryptocurrencies and foreign exchange, is in the process of raising a Series B equity round that is projected to raise about $120m and expected to value the company at approximately $1bn, according to Bloomberg’s sources.
The prime brokerage was established in 2018 by Marc Asch, a former employee of hedge fund billionaire Steven Cohen’s firms SAC Capital and Point72 Asset Management.
In 2022, Hidden Road completed a $50m Series A funding round led by Castle Island Ventures, with other investors including Citadel Securities, FTX Ventures, Uncorrelated Ventures, Greycroft, XBTO Humla Ventures, Wintermute and Coinbase Ventures.
Hidden Road offers prime brokerage services across various markets including foreign exchange, precious metals and digital assets. As a crypto prime broker, Hidden Road, alongside FalconX, have garnered increased attention following the collapse of the FTX exchange, as they assume counterparty risk for their clients. Their services, which include providing financing, have been in high demand as the crypto market recovers from a credit crunch caused by the failure of several lending firms in 2022.
In the aftermath of its plea deal with US authorities, which included a $4.3bn fine, Binance requested that Hidden Road, FalconX and other prime brokers implement stricter checks to prevent US investors from accessing the exchange, according to another Bloomberg report earlier this month.
The report cites Pitchbook data in revealing that the venture capital investment climate has significantly improved for companies involved with digital assets after a challenging year. VC investments in crypto startups reached $2.5bn in Q1 2024, marking a 32% increase from the previous quarter. A notable recent deal involved Berachain, a blockchain platform founded by pseudonymous individuals using bear-themed aliases, which closed a $100m fundraising round last week.
