Crypto custodian Hex Trust raises $88 million in Series B funding

Hex Trust, an institutional crypto custodian based in Hong Kong, has raised $88 million in a Series B funding round.

Animoca Brands and Liberty City Ventures co-led the round, with Ripple, Terra, BlockFi, CoinList, Wintermute, Morgan Creek, Sino Global Capital, Primavera Venture Partners and others participating.

Several prior backers, including Kenetic Capital, HashKey Capital and Fenbushi Capital, also joined the round.

This was a “very oversubscribed” funding round, Hex Trust’s co-founder and CEO Alessio Quaglini told The Block in an interview. The company was initially looking to raise $30 million, but ended up increasing the size of the round given investor interest, said Quaglini.

The round includes both primary capital ($61 million) and secondary investment ($27 million), meaning some early investors sold their shares in this round, according to Quaglini.

Global expansion

Founded in 2018, Hex Trust offers crypto custody, staking, brokerage and financing services to institutional clients with its licenses in Hong Kong and Singapore. The firm says it has a capital markets services license from the Monetary Authority of Singapore and is registered as a trust company in Hong Kong.

With fresh capital in hand, Hex Trust now looks to expand in the Middle East and Europe.

Quaglini said the firm will open an office in Dubai in April and a local CEO has already been appointed. As for European expansion, Quaglini said there are a couple of options on the table, including the UK and Switzerland.

In line with its global expansion plans, Hex Trust is also looking to scale its current team of 100 people to around 160 by the end of this year, according to Quaglini. 

Hex Trust’s primary business is B2B, but it is now looking to also serve retail blockchain gamers. It recently formed a joint venture with Animoca Brands to provide custody and other services to gamers and NFT owners. The joint venture will go live next month, said Quaglini.

Animoca Brands was also a lead investor in Hex Trust’s Series A round worth $10 million in October. Now, as part of the Series B round, Animoca’s co-founder and executive chairman Yat Siu has joined Hex Trust’s board of directors.

The Series B round brings Hex Trust’s total funding to date to over $100 million. Quaglini declined to provide Hex Trust’s specific valuation with this round but said it is “10 times more” than the valuation at the time of its Series A round, which was $30 million. That translates to at least a $300 million valuation currently. 

Hex Trust will be looking to raise another significant funding round later this year. Quaglini said the firm is already in discussions with investors to raise “at least double the size” of the Series B round.

Several crypto custodians have raised mega-funding rounds recently, including Fireblocks ($550 million Series E at an $8 billion valuation) and Anchorage ($350 million Series D at a $3 billion valuation). Thus far this year, crypto funding has broken all its previous records in terms of monthly investments.

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