COSIMO, a quietly moving, diversified crypto holding company, discloses $25 million investment round being led by former Bridgewater exec

The move comes as COSIMO looks to consolidate its host of crypto investment, custody, advisory and brokerage services under “a single, unified visionary brand,” the company announced in a statement on Tuesday. 

COSIMO digital, as the company will henceforth be known, is a relatively quiet player focused on “deep tech.” In operation for a decade, COSIMO has expanded into a number of crypto subsectors and is aiming to become something of a rival to crypto management and service provider Galaxy Digital, except with a foot in the U.S. and E.U.

“Obviously we're not as big as Galaxy, yet — but that's our vision,” co-founder Ciaran Hynes told The Block in an interview. “We've been heads-down building. We haven't embarked on that type of a media strategy seriously until now. We’ve been very, very quiet to date.”

Early tokenizers

In its early days, the firm used special-purpose vehicles to invest in early-stage crypto companies in 2014 before expanding into crypto venture financing in 2017. 

Hynes said he and his co-founder, Rob Frasca, an early internet pioneer who founded several startups acquired by Intuit, Lycos and Nielsen, were “going down the route of a traditional fund” before experimenting with tokenizing it. Meanwhile, COSIMO Chief Technology Officer Ken Lang was CTO of Lycos at the turn of the millennium when it was among the largest web search engines.

“We actually stopped our normal capital raise and decided to go down that route,” Hynes said, adding it took about two years to figure out the tax implications of what was then a relatively novel process. “We had five different sets of lawyers and three different sets of international tax experts — we ended up educating them more than they helped us to be quite honest.”

What ultimately launched in 2019 was the COSIMO X fund, which currently has around $21 million in assets under management, according to rwa.xyz . Hynes noted COSIMO was one of tokenize giant Securitize’s early — possibly first—paying clients and offered feedback as a kind of “beta user” to a firm that now works with the likes of BlackRock and Hamilton Lane. 

Tokenization is one of the crypto space’s most promising sectors, based on the belief that blockchains can improve the entire lifecycle of issuing, maintaining and moving a host of “real-world assets.” Some estimates suggest the tokenized landscape could grow into a multi-trillion industry by the decade’s end. 

'Positive tailwinds'

COSMIO X’s portfolio includes just around 25 placements, including wallet provider Uphold, Bitcoin DeFi pioneer Sovyrn, Layer 1 chain Hedera and tokenization company Black Manta, among other holdings. The fund, which became tradeable on Securitize Markets in 2021, also invested in the unpegged “long-term store-of-value” token ndau, built by one of COSIMO’s investments, Oneiro. The fund has 2.5% management fees and 15% performance fees.

The firm also launched COSIMO Y, a hedge fund built around a basket of staking rewards from chains including Avalanche, Cardano, Celestia, Ethereum, Near, Polkadot and Solana. COSIMO partnered with leading firms BitGo for custody, Figment and Foundry for staking services and CME Group and Coinbase for futures. 

“COSIMO Y is trying to do for investors what Grayscale did for Bitcoin which is make it, you know, very easy to invest in the other 50% of the market,” Hynes said. 

Hynes noted that the firm’s clientele includes “very much traditional finance people,” such as ultra-high-net-worth individuals and family offices. It is also backed by one university endowment from the Rochester Institute of Technology and the European Foundation think tank. He estimated that about 10% of the funds’ investors are “digital natives.”

He added that the firm has seen an uptick of institutional investors “looking to break into the space” in the past four to five weeks due to “the positive tailwinds that have come out of the election and hopefully clarity around the regulatory situation.”

In addition to the X and Y funds, COSIMO founded Fortuna, a digital asset custodian licensed by the Central Bank of Ireland to operate in 27 EU states. The firm is also the largest investor in Black Manta, one of only two BaFin-regulated broker-dealers in the digital asset management space.

Now that news of the firm’s latest strategic round is out, ​​Hynes said the firm is planning another series of announcements, including a new project involving the “creator economy.” 

"We are excited to partner with COSIMO digital on their future expansion and believe they are a very significant player in these emerging and exciting markets,” Mac Intyre said in a statement.