Tagomi, a startup that bills itself as crypto’s answer to Wall Street prime brokerages, has raised another $12 million in a funding round led by Paradigm.
Other participants in the round announced Monday include Pantera Capital, Four Arrows and Multicoin Capital. Tagomi previously secured backing from Digital Currency Group, Peter Thiel’s Founders Fund, Collaborative Fund and others. The firm has raised a total of $28 million to date.
Jennifer Campbell, a Tagomi co-founder, told CoinDesk that the latest funding round, whose participants included the firm’s institutional investor clients, “is a strong validation of our business model.”
In traditional finance, prime brokerage refers to a bundle of specialized services offered by investment banks and securities dealers to their hedge fund clients. Tagomi is “agency-only”, meaning that the firm offers consulting services for its clients to determine “how best to execute a trade or fund strategy”, Campbell explained, adding:
“Importantly, it also means that we can optimize for best execution – our clients are sophisticated investors who care strongly about execution and price transparency.”
The brokerage offers trading services for bitcoin, ethereum and other digital assets, and went live in December.
Margin, lending and shorting
With the new funding, the firm said it plans to expand its operations to support increasing client demand. It also plans to work to improve its trade execution and transparency.
Campbell added that Tagomi plans to continue building out its global coverage, as well as margin, lending, shorting and other prime broker services for its customers.
“We are excited to bring all the technical advances of the securities markets to the digital asset space, and drive the evolution towards a more mature market structure”, she said.
In a statement, Paradigm founding partner Matt Huang said he viewed Tagomi’s offering as “the next step in the evolution of how digital assets trade.”
Tushar Jain, a managing partner at Multicoin, told CoinDesk through a spokesperson that Tagomi co-founder and CTO Greg Tusar’s “record speaks for itself”, citing his 20-year career in working with trade and execution products, the two previous brokerages he’s built and his time with Goldman Sachs and KCG Holdings.
“The fact that he recognizes the opportunity in crypto and has elected to build core infrastructure for it speak volumes for the industry. We’re proud to support him and as his team as they lay the rails for the next crypto bull market”, Jain added.