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Champ Titles Raised $18M from Point72 Ventures
Champ Titles Raised $18M from Point72 Ventures

Architect Partners was the exclusive Financial Advisor to Champ Titles.

Transaction Overview

On March 27, 2024, Cleveland-based digital title and registration platform Champ Titles announced an $18 million Series C equity round led by Point72 Ventures with participation by existing investors.

Company Description

Champ Titles provides a digital title and registration suite to streamline the vehicle titling process. Their platform enables the creation of legal, digital titles for easy transfer and verification, serving insurance carriers, lenders, state governments, auto dealers, and owners. Stakeholders, including state motor vehicle departments, lenders, and vehicle owners, benefit from a unified and transparent system, where all information is readily accessible and transaction times are markedly reduced. The governance of the digital platform is established through clear guidelines, ensuring all parties adhere to the updated processes and regulations.

Champ Titles’ success is measured by the elimination of more than 5 million pieces of paper annually on average per state; a reduction in processing time from 40-60 days to a matter of hours; increased productivity of DMV title clerks processing more than five times as many titles per day; and the improved experience for consumers in each state that has adopted Champ Titles’ solutions. Over the last twelve months, the company has successfully onboarded new states including New Jersey, Kentucky, and Illinois, and expanded its relationship with West Virginia by creating the first National Digital Titling Clearinghouse (NDTC). Through these efforts, the company has grown rapidly with revenue increasing by more than 300% year over year. 

Founded in 2018 by CEO, Shane Bigelow, the company now has 63 employees and is headquartered in Cleveland, Ohio. 

Funding

In this Series C funding round, Champ Titles raised $18M from Point72 Ventures and existing investors including W.R. Berkley Corporation, Eos Venture Partners, Guidewire Software, and Rev1 Ventures, bringing the total amount raised since inception to $45M. 

In the prior Series B round, Champ Titles raised $13M from Guidewire Software, Eos Venture Partners, and Ally Ventures.

Before that, Champ Titles raised $13.5M in 2021 in a Series A. Emergents, now Architect Partners, served as the exclusive Financial Advisor for that financing. 

Competition

Champ Titles’ biggest competitors are existing state DMVs deciding to be a software company and developing solutions on their own or via large systems developers.  However, they also compete with other digital title networks such as Cario and Oxhead Alpha/Tezos. In addition, technology-enabled DMV solutions such as Fast Enterprises are seen as competitive but don’t offer the same efficacy.

 

Architect Partners’ Perspective

Champ Titles’ SaaS-based solutions present a compelling example of blockchain-enabled infrastructure solving real-world problems.  By focusing on the needs and pain points of legacy auto title, registration, and lien processing, Champ has leveraged the power of blockchain to transform critical government services.  The result is exponentially accelerated processing time for DMV constituents, with improved accuracy and reduced cost.  Yet Champ’s solutions capture many key benefits of on-chain data processing – which include trust, transparency, data integrity, security, and efficiency – without users even being aware of their blockchain foundations.  

While much attention is focused on recent resilience in crypto asset prices, we believe 2024 will see significant growth in non-speculative enterprise applications for distributed ledger technology.  Champ’s successful raise demonstrates investor interest in practical and scalable solutions to real-world problems.

Alerts

Ripple Acquires Metaco

Arjun Mehra & Michael S. Klena
May 17, 2023
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Ripple Acquires Metaco For $250M

Transaction Overview

On May 17th, 2023 Ripple announced the acquisition of the digital asset custody technology provider, Metaco for $250M. 

 

Target: Metaco

Metaco provides digital asset custody infrastructure to global banks, fintechs, regulated exchanges, and large corporations. Metaco’s suite of products, branded Harmonize, is used by large financial institutions such as Citibank, GazpromBank, BBVA, and BNP Paribas, allowing their clients to trade, settle, transfer, and custody digital assets. Metaco’s technology uses a combination of Hardware Security Modules (HSM) and Multi-Party Computation (MPC) technologies, allowing for a mix of hot, warm, and cold digital asset storage. 

 

Metaco’s closest competitors include PolySign, Fireblocks, Copper, HexTrust, Anchorage Digital, Zodia Custody, Etana, and Komainu. 

 

The company was founded in 2015 in Switzerland by Adrien Treccani, CEO, and Nicolas Dorier, CTO and now has over 100 employees.  Metaco has raised a total of $21M in capital over three rounds, with their latest round taking place in June 2020 at a $46M post-money valuation, where they raised $17M in a Series A. Investors include Giesecke+Devrient Ventures (lead), Standard Chartered Ventures, Swisscom, Avaloq, FiveT Fintech, Zürcher Kantonalbank, and SIPCA Holdings. 

 

Buyer: Ripple

Ripple specializes in blockchain-based international payments. Their cross-border payment solution, RippleNet, has processed nearly $30B worth of volume and 20M transactions since it was first launched. Clients of Ripple include large institutions and governments including SBI, Nium, Tranglo, Siam Commercial Bank, and the Monetary Authority of Bhutan. 

 

Investors in Ripple include GV, Accenture Venture, a16z, Founders Fund, and Lightspeed, with a total of over 86 investors. Ripple’s last disclosed equity valuation was $15B in January 2022’s secondary sale of equity. XRP, the native cryptocurrency of the Ripple ecosystem, has a token market capitalization of $23B, making them the 6th largest cryptocurrency by market capitalization globally as of May 17, 2023.

 

Ripple is currently undergoing a lawsuit with the SEC that was filed, in 2020, against Ripple alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering. According to CEO Brad Garlinghouse, Ripple has over $1 billion of cash on its balance sheet. 

 

Ripple was founded in 2012 by Chris Larsen, Executive Chairman, and Jed McCaleb. Brad Garlinghouse has been the CEO since 2017 and leads the firm’s ~900 employees. The company is headquartered in San Francisco, California.

 

This is the first major acquisition by Ripple and the firm is an active strategic investor, having invested in 15+ private firms since 2021.

 

Transaction Parameters

Ripple acquired Metaco for $250M, consisting of 50% cash and 50% equity, in its first major acquisition. Metaco will become a wholly-owned, independent unit under Ripple, led by the current Metaco CEO, Adrien Treccani.

 

Comparable digital asset custodian acquisitions include Galaxy Digital | GK8 ($44M, M&A Alert), Bitpanda | Trustology (ND, M&A Alert), Celsius | GK8 ($115M, M&A Alert), Genesis | Vo1t (ND), PayPal | Curv (~$200M, M&A Alert), Voyager Digital | Ethos.io ($4M), Binance | Trust Wallet (ND), and Coinbase | Xapo ($68M).

 

Strategic Rationale

Ripple seeks to transform the $156T cross-border payment market, has initiatives focused on the emerging opportunity for Central Bank Digital Currencies (CBDCs) and has aspirations to allow the issuance and settlement of any type of tokenized asset as that market develops.  A common theme among each of these capabilities is ensuring the safekeeping and security of these payments and digital assets. Metaco’s custody technology and related products allow Ripple to protect client assets, control the evolution of the technology and related services as needs dictate and represents a potentially attractive new revenue stream as assets under custody scale.

 

Architect Partners’ Observations

There are several dynamics within the custody market that suggest further strategic transactions will likely occur.

 

The first is regulatory guidance, particularly in the US.  Recent regulator announcements suggest that only registered Qualified Custodians (QCs) are allowed to custody digital and crypto assets.  Few QCs exist today.   Further, regulators have guided that the function of custody needs to be separated from execution venues, which while consistent with how traditional assets like equities are handled, flies in the face of current common practice for crypto assets.

 

Second, companies like Northern Trust, BNY Mellon, State Street, JP Morgan, and Euroclear have built substantial custody businesses protecting traditional assets over the past 100 years. Many of these businesses have been inhibited, by both regulatory uncertainty and brand risk, from aggressively entering the crypto and digital asset custody markets. This will change and represents both a threat and an opportunity for those building specialized digital and crypto asset custody businesses.

 

Third, the crypto winter we’ve experienced has effectively put a pause on assets under custody (AUC) growth which has meant flat or declining revenue for many existing crypto custody specialists, requiring financial staying power and conviction that an upturn is coming.

Ripple acquires Metaco Ripple acquires Metaco