BY MICHELLE LIM
As blockchain and crypto adoption grows, blockchain data analytics has also come to the fore with investors, businesses and governments increasingly using the information to guide investment strategies, manage risk, conduct cybersecurity investigations and comply with anti-money laundering and counter-financing of terrorism (AML/CFT) regulations.
Anticipating an even greater demand for blockchain and crypto data analytics in the future, venture capitalists are pouring money into companies providing these services. San Francisco-based TRM Labs closed a US$14 million Series A funding round earlier this month, and just last week, Chainalysis raised an eye-watering US$100 million through a Series E funding round for a US$4.2 billion valuation.
Today, Nansen, a Singapore-based blockchain data analytics platform for decentralized finance (DeFi), announced a US$12 million Series A funding round led by Andreessen Horowitz (a16z), the Silicon Valley-based tech and crypto venture capital firm that just launched a US$2.2 billion fund for crypto-related investments. Skyfall Ventures, Coinbase Ventures, imToken Ventures, Mechanism Capital and QCP Capital also participated in the fund raise.
Blockchain analytics companies generally provide blockchain data, software and related services to cryptocurrency exchanges, governments, financial institutions and cybersecurity companies. For example, Elliptic, a London-based blockchain AML analytics provider, this month completed a pilot with Banco Santander, a retail and commercial bank headquartered in Spain, to help the bank assess its exposure to crypto by analyzing transactions between the bank’s customers and crypto exchanges.
Singapore’s Nansen, which was founded in 2020, plans to use the fresh capital to build its team, improve its data platform, grow its user base and expand its service from Ethereum to more blockchains and side chains, including Binance Smart Chain, Polygon and Arbitrum, according to a company statement shared with Forkast.News.
“As participation in the first truly open global financial markets grows, traders and collectors of all kinds — retail novices, institutional professionals, independent experts, and more — will want to understand what the smart money is doing across all blockchains,” said Chris Dixon, general partner at Andreessen Horowitz, in the statement. “We’re thrilled to support them as they build DeFi-native analytics products that offer insights for a new generation of investors at an important moment for crypto.”
Alex Svanevik, CEO of Nansen, told Forkast.News that unlike many of its competitors, “Nansen is built for investors and traders in crypto and DeFi. Until now, most blockchain analytics companies have been building for regulators, government agencies, and law enforcement.”
“The only way blockchains truly become the future of finance is if we have extremely high-quality data and analytics,” Svanevik said. “Imagine how important Google has been for how we navigate the world wide web, surfacing the right websites for the right queries, based on data and algorithms.”
Crypto analytics, Svanevik says, provides a competitive advantage. “Our mission with Nansen is to surface the signal in blockchain data, and ensure that the pioneers who enter decentralized finance and crypto markets more broadly, come out as winners in this new economy.”
“As crypto becomes increasingly multi-chain and multi-layered, analytics products also become increasingly important to surface what’s important,” Svanevik said. “This is a clear sign of the maturation of the space, and access to more analytics will be beneficial to anyone who wants to see the crypto industry grow.”