Digital asset risk management startup Cloudwall Capital has raised $6.3 million in seed funding.
Founded in 2021, the company is building a product, Serenity, which will provide institutional investors with the risk management insights to effectively build portfolios and manage risks inherent in digital assets so they can invest confidently.
It says that recent volatility in the digital assets market has shown a clear need for a platform that can help investors assess risk and correlation more accurately, make better decisions when it comes to investing and demonstrate to their investors that they have institutional-grade stacks to assist their work.
The seed round was led by LocalGlobe and Illuminate Financial. They were joined by a syndicate of investors including IA Capital Partners, Eberg Capital and NEMO Ventures, along with founder and operator angel investors from across decentralised and traditional finance.
It will see the company grow its team to 15 people by the end of the year and further develop the platform with an aim to launch an early access program this summer.
Cloud-based platform Serenity combines risk management with research to give investors an overview of their assets and potential. It allows investors to pull in their portfolios and access historical data from a range of sources including centralised exchanges and blockchain data to analyse and demystify the digital asset market, including the ability to break down the entire market.
The platform’s statistical and machine learning algorithms will also enable investors to run simulations and stress tests on their portfolios to see how they will behave. Serenity doesn’t offer advice to managers on what to do – instead, it provides clients with the data and insights to understand the context of what is going on and likely outcomes to support better decisions.
CEO Kyle Downey was the MD and global head of automated risk trading and quantitative investment strategies IT at Morgan Stanley, while COO Jia Yng Wee spent 20+ years in global markets and private banking at Morgan Stanley, DB, Coutts and Nomura, covering senior operations and business management roles.
Head of research Ilya Kulyatin is a former FinTech founder and has more than a decade of quant research experience in hedge funds, asset management and market-making.
“Digital assets underwent explosive growth between 2020 and 2021, with almost five years of growth taking place overnight,” said Downey.
“Recent market gyrations have only increased the case for a digital asset platform to manage risk so that institutional investors have the tools and platforms to help manage their portfolios and risks. We’re building Serenity to do just that and we’re excited about the potential for this platform to enable more people to invest in digital assets and unlock trillions of dollars of assets on the blockchain.”
Alexander Ross, general partner at Illuminate Financial, said: “Over the course of 2021 a large number of TradFi institutions, some of which are LPs in our funds, started to invest in crypto assets. As a result, we are seeing significant demand for an institutional-grade risk management solution.
“Recent market conditions further exacerbate the need for risk management solutions and we believe strongly that Kyle, Ilya and Jia are the perfect team to build this.”