- Crypto IRA startup iTrustCapital announced it raised a $125 million Series A round on Wednesday.
- The startup offers crypto exposure via dedicated IRAs for no monthly fees.
- See the 8-page pitch deck iTrustCapital used to raise its Series A.
Todd Southwick and Blake Skadron stuck to a simple mandate when they were building out iTrustCapital, a $1.3 billion fintech that strives to offer cryptocurrencies to the masses via dedicated individual retirement accounts.
“We wanted to make a product that we would feel happy recommending for our parents to use,” Southwick, the CEO of iTrustCapital, told Insider.
That guiding framework resulted in a software system that helped to digitize and automate the traditionally clunky and paper-based process of setting up an IRA for alternative assets, Southwick said.
“We saw a real opportunity within the self-directed IRAs because we knew at that point in time, there was a fairly small segment of people that was willing to deal with the inconvenience of having to set up an IRA” for crypto, Southwick said. The process often involved phone calls to sales reps and over-the-counter trading desks, paper and fax machines, and days of wait time.
iTrustCapital allows customers to buy and sell cryptocurrencies using tax-advantaged IRAs with no monthly account fees. The startup provides access to 25 cryptocurrencies like bitcoin, ethereum, and dogecoin — charging a 1% transaction fee on crypto trades — as well as gold and silver.
The fintech’s software looks to eliminate the inefficiencies within the traditional IRA model, like cutting down the time it takes to fund a new account, automating reconciliation processes, and digitizing the flow of documents to transfer funds between IRAs.
The product has resonated with consumers and investors alike.
Founded in 2018, iTrustCapital now has $2 billion of assets under management across roughly 27,000 accounts, with an average account size of about $55,000. The startup, which brought in $47 million in revenue in 2021, has been bootstrapped since its inception — until now.
The Long Beach, Calif.-based fintech raised $125 million in a Series A round led by Left Lane Capital, iTrustCapital announced Wednesday. The funding brings iTrustCapital’s valuation to north of $1.3 billion.
With the funds, iTrustCapital has set its sights on expansion: The upstart expects to add 180,000 new, funded accounts, totalling more than $6 billion of assets under management, with revenue reaching at least $180 million by the end of 2022.
iTrustCapital saw growth among younger users after it removed monthly service fees this past November, Southwick said, in a bid to reach a broader audience that’s just beginning to plan for retirement. There are also plans to branch out beyond IRAs, with Southwick eyeing crypto-staking services, which allows users to earn passive income on certain coins.
The startup had initially planned to raise its Series A during what turned out to be an inauspicious time: March 2020. With iTrustCapital’s team working remotely, the company decided to instead table its fundraising plans and focus on growing its services, becoming profitable by that May.
“It forced us to work with a small amount of money. We only had raised about $1.2 million, so we cut down expenses and we figured out how to work as efficiently as possible,” Southwick said.