In an interview, the company stated that Fordefi, a cryptocurrency wallet startup, has secured $10 million in venture funding with the goal of addressing a major issue in the industry by bringing its institutionally focused wallet service to retail-facing platforms.
Electric Capital spearheaded the financing effort, with new investors Paxos and Alchemy following suit. The financing came after a November 2022 $18 million seed funding raise, which included participation from Jump Crypto, Lightspeed Ventures, and Pantera funding.
Retail and institutional cryptocurrency investors lost billions of dollars due to hacks on decentralised finance (DeFi) apps or because they were unable to access their digital assets stored on defunct platforms like FTX.
Josh Schwartz, the CEO and co-founder of Fordefi, stated in an interview that the company wants to make cryptocurrency safer with its self-custodial wallet that uses multi-party computation (MPC), which distributes a single private key among several parties, removing a single point of failure. MPC wallets reduce the risk of using DeFi apps because they are more difficult to hack.
The business has already secured over $3 billion in blockchain transaction volume and onboarded institutional investors including Pantera Capital, DeFiance Capital, Keyrock, and Flare Network to their MPC wallet.
Fordefi is now expanding its wallet-as-a-service offering to retail-facing platforms, including Web3 companies, financial platforms, and exchanges, in order to provide user-owned (self-custodial) wallets within their apps.
Curtis Spencer, co-founder and general partner at Electric Capital, said in a statement that “Fordefi changes the game for safe institutional access to DeFi and crypto by providing novel tools around MPC, user policies, and transaction simulation.” “They extend their industry-leading technology to any business wanting to give their customers the best possible combination of security and user experience to get on-chain with their new wallet-as-a-service offering.”