Our investment in Notabene — enabling compliance for crypto transactions

We are excited to announce our investment in Notabene’s $10m+ Series A alongside F-Prime Capital, Jump Capital, Luno, Bitso, CMT Digital & Fenbushi Capital. Existing investors include Castle Island Ventures, Green Visor Capital and Signature Ventures.

Notabene has developed compliance infrastructure that will enable both crypto native businesses to meet their regulatory obligations and catalyze broader adoption of digital assets by regulated financial institutions.

At Illuminate, we believe that we are still only at the foothills of unlocking the full potential of blockchain technology. From increasing settlement efficiency of existing financial instruments through tokenizing on permissionless blockchains, to widespread automation of payments through use of programable capital in the form of cryptocurrencies/stablecoins — the rate of innovation and long term potential is dizzying.

However, as of today, parts of the crypto ecosystem falls short on regulatory compliance— including knowing your counterparty on decentralized exchanges (DEXs) or complying with the “Travel Rule”.

Notabene enables its clients to transact with crypto in compliance with the Financial Action Task Force (FATF) “Travel Rule”. The travel rule requires virtual asset service providers (VASPs) for example crypto exchanges, payment providers, issuers etc… to exchange customer data for each crypto transaction over a certain threshold (typically $1,000-$3,000). This data in turn enables compliance with existing KYC and AML regulations. Further reading here on the Travel Rule as it relates to crypto transactions.

All crypto native businesses and financial institutions that want to touch digital assets will need to comply with the travel rule. We estimate the current market to be ~40K companies growing at a 70%+ CAGR.

Enabled by their first mover advantage, Notabene’s business is driven by a strong network effect as more and more transactions with an exponentially increasing number of counterparties are sent through their systems. In addition, they maintain strong and collaborative relationships with the regulators thanks to their success in bringing broader regulatory compliance to the crypto ecosystem.

We were introduced to co-founders Pelle Brændgaard and Alice Nawfal as “rockstars” by Anton Katz the CEO and co-founder of Talos, an Illuminate portfolio company. Pelle and Alice have worked together for years building an on-chain identity management product — uPort and bring a wealth of relevant experience to solving the travel rule compliance problem for the industry.

We are excited to partner with an impressive group of co-investors, from Jump Capital and Castle Island Ventures who we have previously co-invested with to F-Prime Capital, Signature Ventures, CMT Digital, Green Visor Capital & Fenbushi Capital. In addition, it is always fantastic to see clients, including Luno & Bitso, invest in this round.

Illuminate partners closely with “TradFi” (traditional financial institutions), we are backed by major players, including JPMorgan, Barclays, IHS Markit, Deutsche Boerse, amongst others and our portfolio companies serve 1,400+ “TradFi” organizations. We actively invest in crypto infrastructure, our existing investments include: custody (Copper, Curv — acquired by PayPal), execution (Talos), and node management (BlockDaemon). We serve as a conduit between these rapidly converging crypto and TradFi worlds — investing in and introducing what we see as market leaders into our TradFi network.