Goldman Sachs and Barclays Invest in Alan Howard’s Crypto Platform

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 mainstream adoption of digital assets.

The two banks invested alongside venture capitalist Dawn Capital, as well as the venture arm of German bank Commerzbank and US billionaire Mike Novogratz’s crypto-finance conglomerate Galaxy Digital. The round, Elwood’s first outside funding, valued the six-year-old company at about $500 million, according to people familiar with the matter.

Elwood is counting on traditional financial institutions — from hedge funds to banks and family offices — to put more money into digital assets despite the sharp fall in crypto-asset prices.The market cap of the top 500 digital assets has more than halved from last year’s highs, according to data collated by CryptoCompare Financial Times. Bitcoin fell below $30,000 on Tuesday for the first time since July.

Elwood’s funding round comes ahead of its most recent weekly decline. Founded as a vehicle for managing Howard’s personal crypto wealth, the company provides market data and trading infrastructure to large investors in digital assets.

CEO James Stickland shrugged off the drop, calling the fundraising “another validation of the longevity of cryptocurrencies.”

“We’re getting investment from financial institutions that don’t expect huge returns in 15 minutes. They’re investing in infrastructure,” he said. “I think that’s a reassuring message.”

$70 million fundraiser underpins change in direction for Elwood, which also focuses on asset management in 2019, plans to provide Portfolio of Crypto Funds for institutional investors. Stickland, who joined the firm in 2020, said Elwood now sells the technology it developed in-house to manage its own crypto investments to other clients.

“As institutional demand for cryptocurrencies has risen, we have been aggressively 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 shows the U.S. bank’s “continued commitment” to digital assets.

According to Stickland, Elwood offers a technology platform similar to Bloomberg Terminal or BlackRock’s Aladdin Portfolio Management System, designed to plug into financial institutions’ existing trading software to help them manage and trade their crypto investments combination.

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

“Unless you have the infrastructure, and you’re comfortable with the quality of the underlying architecture, you’re never really going to get the volume that matches the opportunity,” Stickland said.

Elwood will remain majority-owned by Howard, who had been its lead investor before the deal. The co-founder of Brevan Howard hedge fund is one of the most prominent British investors involved in the crypto market.

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