Kleiner Perkins Backs $2 Million Seed Round for Crypto Derivative Data Firm

Cryptocurrency data analytics startup Skew has raised $2 million in seed funding from several venture capital firms, including Silicon Valley icon Kleiner Perkins.

Announced Wednesday, the seed round was led by London-based FirstMinute Capital, with participation from Seedcamp, Kima Ventures and QCP Capital. The company declined to disclose its valuation.

The company’s skewAnalytics service, launched concurrently with the raise announcement, provides a real-time overview of crypto derivatives markets with more than 100 charts on crypto futures and options. A company of 10 employees, many from traditional finance, London-based Skew is building out features for institutional clients to visualize historical data as well as create dashboards and is hiring in engineering and eventually in distribution. 

“Where we want to focus is on corporates and institutions that need this data to run their business,” Skew CEO and co-founder Emmanuel Goh told CoinDesk. “We have had heard concerns from interested traders and firms, and they would be able to generate backtest strategies from this data.”

Goh and his co-founder Tim Noat worked as traders of flow derivatives and exotic options at JPMorgan Chase and Citi, respectively, before starting the company. 

The firm’s analytics tools resemble the institutional-grade tools one would find for established products such as foreign exchange and equity, Monica Desai, an investing partner at Kleiner Perkins, told CoinDesk by email.

“As a former trader I’ve found many of their tools (some forthcoming) to feel the most trading floor-native or Bloomberg-esque and am excited to see how they evolve the product as the crypto derivatives space grows exponentially in the next year,” said Desai, who used to manage bond portfolios at JPMorgan.

Derivatives’ day

Crypto derivatives took off in 2018 after the brutal market correction of 2017 and are showing a resurgence driven by institutional adoption, Goh said.

Swaps are being traded in the billions every day on offshore venues, and regulated entities are ramping up offerings. For example, CME plans to launch bitcoin options in Q1 2019 and Intercontinental Exchange’s bitcoin futures platform Bakkt debuted Monday (though it didn’t do much volume).

“Bakkt is the first time large institutions can build physical coins,” Goh said, referring to the fact that the futures contracts are settled in real bitcoin rather than cash. “It’s going to be a moment of proof for the industry.”

While crypto derivatives markets are fragmented, Skew has contracted a number of licensing agreements with crypto exchanges.

According to Skew’s data, aggregated bitcoin options have grown more than sixfold from last year’s fourth quarter to $34.8 million this quarter.  

Image of Monica Desai via CoinDesk archives