Gauntlet said that the demand for crypto financial tools has surged following the massive rise of decentralized finance (DeFi) for managing adequate risks.
Gauntlet, a crypto-focused financial modeling platform, has secured the status of a unicorn after raising $23.8 million during its latest Series B funding. Palo Alto-based venture capital firm Ribbit Capital was leading the investment round.
Gauntlet Series B Funding
Some of the other big players participating were Polychian Capital and Paradigm. With the new funding capital, Gauntlet plans to expand to new industry verticals including gaming. Besides, it will also use these funds towards team expansion.
Wall Street veteran Tarun Chitra who previously worked at D.E Shaw founded Gauntlet back in 2018. Gauntlet specializes in offering financial modeling and simulation tools to the crypto sector with a focus on capital efficiency and risk.
It also runs a “stress test” to ensure that institutions aren’t taking excessive risks with crypto exposure. Gauntlet has found its popularity, especially among the DeFi platforms. Using data from crypto exchanges, Gauntlet runs an algorithm to help DeFi companies to decide on the optimal level of lending and collateral.
The company’s two biggest clients from the Defi space are Compound and Aave. As per their voting disclosures, both these DeFi platforms pay Gauntlet upward of $5 million per year in fees. Talking about their plans ahead, Chitra said:
“The data processing is just strictly getting harder. We’re trying to invest in our platform, make sure it scales to as many chains as possible.”
Growing Demand for Analytics in Crypto
As the crypto market continues to become mature, there’s been an increasing demand for powerful analytics tools. Furthermore, the rise of DeFi has been spreading the use of digital assets to a broader spectrum of financial markets.
With high-end double-digit returns, there’s very high participation currently in the DeFi space. Speaking about it, Chitra said:
“Some parts of DeFi will advertise very high yields. They don’t tell you where the yield is coming from, and you can only figure it out by analyzing the users and the mechanism involved. When we work with a protocol, we do as much diligence on them as they do on us.”
As a result, crypto-analytics firms are becoming more and more popular with venture firms. Last month, Dune Analytics also attained a unicorn status post raising $70 million.