Birch Hill raises $4M seed round led by Multicoin to bring U.S. loans onchain
In brief
- Multicoin Capital led Birch Hill's $4 million seed round, the company said.
- ParaFi, Castle Island Ventures, and Nascent joined; total funding now stands at $6.5 million.
- Birch Hill curates vaults on Morpho and has applied to FINRA for broker-dealer membership.
- Birch Hill plans to securitize U.S. multifamily, agriculture, and energy loan pools for onchain holding.
Who's backing it, and who's building it
ParaFi Capital, Castle Island Ventures, and Nascent also participated, per the company's announcement as reported by Decrypt. The money funds an eight-person team.
CEO Bhavin Vaid is a former Goldman Sachs investment banking analyst who later worked in private equity at Cerberus Capital Management and co-founded crypto investment firm Halo Capital. Co-founder and COO Connor Flanagan spent more than four years at BlackRock (including time on its Aladdin risk platform) before roles at Digital Currency Group and Flipside.
The defi bench is deep, too. Three hires come from vault platform Yearn: Brad Schlagel, who led development of Yearn v3, plus Ian Plosker and Alex Cornwell. Traver Normandi joined from risk management firm Gauntlet to lead business development.
“Loan originators need new sources of capital, and onchain lenders need credit they can trust,” Vaid said in a statement.
Three divisions
Birch Hill operates in three divisions. Its Vaults arm is an official curator on Morpho, an onchain lending protocol, where it assesses credit and sets risk parameters for vaults and markets. (Morpho also powers Coinbase's fixed-rate USDC loans against Bitcoin, Decrypt noted.) The Strategies unit builds onchain credit products, including one called Birch Hill Absolute Value.
The third piece is the one that matters most for the regulated pitch.
Birch Hill said its Enterprise division has applied to FINRA for broker-dealer membership, which would let it place private credit offerings with verified accredited investors. It's an application, not an approval.
The longer-term plan
Longer term, the firm plans to securitize pools of U.S. multifamily, agriculture, and energy loans designed to be held onchain within the U.S. regulatory framework. That's the plan as the company describes it. Birch Hill said it met with the SEC's Crypto Task Force in August as part of that effort.
The argument behind it is simple enough. Birch Hill argued that banks, insurers, and other fiduciaries will only allocate to credit packaged in structures they recognize, which is why it's leaning on familiar wrappers rather than bespoke crypto ones.
Decrypt also noted that the SEC proposed Regulation Crypto Assets in August, which would let projects raise money through token sales without full registration.
Frequently asked questions
What does Birch Hill do?
Birch Hill is a New York startup that aims to put American apartment, farm, and energy loans on public blockchains. It operates in three divisions: a Vaults arm that curates on Morpho, a Strategies unit building onchain credit products, and an Enterprise division that has applied to FINRA for broker-dealer membership.
Who invested in Birch Hill's seed round?
Birch Hill said Multicoin Capital led its $4 million seed round, with participation from ParaFi Capital, Castle Island Ventures, and Nascent. The round brings the company's total funding to $6.5 million.
