Founders Fund and Pantera Lead $20M Investment in Ondo Finance to Build a Decentralized Investment Bank
NEW YORK, April 27, 2022 /PRNewswire/ — Ondo Finance has raised a $20M Series A to accelerate the adoption of DeFi among mainstream investors. This latest round of funding was led by Founders Fund, the venture capital firm founded by Peter Thiel, and Pantera Capital. The funding will allow Ondo to build out its team and support new product launches including its multi-chain expansion. Strategic investors joining the round also included Coinbase Ventures, GoldenTree, Wintermute, Steel Perlot (Michelle Ritter / Eric Schmidt), Tiger Global, and Flow Traders.
Ondo Finance is building a decentralized investment bank focused on connecting stakeholders in the emerging DeFi ecosystem, including decentralized autonomous organizations (DAOs), institutions, and retail investors. As its first offering, the company built a novel primitive for decentralized structured products that offer choice between downside protection and enhanced returns.
The company quickly expanded to other use cases, such as its Liquidity-as-a-Service (LaaS) offering, which matches DAOs with underwriters to provide liquidity for a DAO’s native token, so that its users can easily trade its token in decentralized exchanges. Ondo has partnered with more than ten DAOs including Terra, Frax, and Fei, and has seen more than $200 million in liquidity deposited into its protocol. With its rapid organic community growth and product adoption, Ondo is ready to begin decentralizing governance with its upcoming launch of the ONDO token and related DAO.
“We’ve been delighted to see the demand for Ondo’s community vaults and Liquidity-as-a-Service offerings, which have really been a simple MVP with no liquidity mining or other incentives from us”, says Nathan Allman, Founder and CEO of Ondo Finance. “We’re excited for some new product launches that will make it much easier for passive investors to obtain broad exposure to DeFi yields at a customized risk level.”
Over the next few months, Ondo plans to launch several additional products with the aim of increasing the breadth, usefulness, and accessibility of its offerings. These include vaults that bundle yields from algorithmic stablecoins as well as vaults that aggregate yield across different blockchains.
“The growth of algorithmic stablecoins and expansion of DeFi from Ethereum to other blockchains has led to tremendous yield opportunities but with greater complexity and risks,” says Paul Veradittakit, Partner at Pantera Capital. “Ondo will make it possible for investors to get passive exposure to this increasingly scattered but abundant yield while receiving downside protection or enhanced returns.”
These new vaults will help build momentum for the company to grow its current ecosystem and user base. To increase demand, Ondo is expanding its product compatibility with other protocols such as Curve and Convex. To broaden capital supply, Ondo seeks to make its offerings more accessible through integrations with crypto exchanges, web2 fintechs and custodians.
“We’re incredibly impressed with the early success of Ondo’s structured products and we’re excited to see the team expand its offering,” says Napoleon Ta, Partner at Founders Fund. “Built by a world-class team at the intersection of crypto and institutional finance, Ondo is well-positioned to be a preeminent player in the continued ascent of DeFi into mainstream adoption.”
Ondo Finance is building a decentralized investment bank. Like a traditional investment bank, Ondo aims to be a hub matching those who have capital with those who need it through the creation of customized financial products (e.g. equities, bonds, structured products, derivatives, etc.) that organizations can offer to investors to raise money. Historically, this work has often been highly manual, expensive, and reliant on intermediaries. Decentralized finance (DeFi), however, presents novel infrastructure and financial primitives to enable investment banking activities that are automated, composable, and accessible to everyone. Ondo’s focus is to build software that finds attractive investments across the traditional and DeFi landscape, repackages these assets into easily understood risk/reward offerings, and then matches and offers these assets to both institutional and retail investors.
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