COSIMO Digital

COSIMO, a digital asset holding company founded in 2014, is raising $25 million in a funding round led by Des Mac Intyre, co-founder of Eolas Capital and a former executive at Bridgewater Associates and Mellon Investments Corporation.

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

COSIMO Digital

As the company will henceforth be known, COSIMO Digital is a relatively quiet player focused on "deep tech." Operating for a decade, COSIMO has expanded into various crypto subsectors and aims to rival Galaxy Digital, with interests in both the U.S. and the 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 media strategy seriously until now. We’ve been very, very quiet to date."

Early Tokenizers

In its early days, COSIMO used special-purpose vehicles to invest in early-stage crypto companies in 2014 before delving into crypto venture financing in 2017. Hynes noted that he and co-founder Rob Frasca, an early internet pioneer, initially pursued a traditional fund route before experimenting with tokenization.

"We actually stopped our normal capital raise and decided to go down that route," Hynes recounted, adding it took two years to sort out the tax implications of the 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."

COSIMO launched the COSIMO X fund in 2019, which currently manages about $21 million in assets, per rwa.xyz. The company was also one of the early clients of Securitize, providing feedback as a 'beta user' for a firm that now collaborates with heavyweights like BlackRock and Hamilton Lane.

Tokenization is considered one of the most promising sectors in crypto, with estimates suggesting it could evolve into a multi-trillion dollar industry by the end of the decade.

Positive Tailwinds

COSIMO X’s portfolio features around 25 placements, including wallet provider Uphold, Bitcoin DeFi pioneer Sovryn, Layer 1 chain Hedera, and tokenization company Black Manta. The fund, tradeable on Securitize Markets since 2021, invested in the unpegged token ndau, developed by Oneiro, one of its investments. It charges 2.5% management fees and 15% performance fees.

COSIMO also launched COSIMO Y, a hedge fund centered around staking rewards from various chains like Avalanche, Cardano, and Ethereum. Partnering with BitGo for custody, Figment and Foundry for staking services, and CME Group and Coinbase for futures, COSIMO aims to simplify investing in the larger portion of the market.

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

The firm's clientele includes traditional finance individuals, ultra-high-net-worth persons, and family offices, with backing from the Rochester Institute of Technology and the European Foundation think tank. Hynes indicated a recent uptick in institutional investors seeking entry into the crypto space, attributed to "positive tailwinds" from recent elections and hopeful clarity around regulatory situations.

In addition to the X and Y funds, COSIMO has established Fortuna, a digital asset custodian licensed by the Central Bank of Ireland to operate in 27 EU states. It also holds significant investments in Black Manta, one of two BaFin-regulated digital asset broker-dealers.

Looking ahead, Hynes hinted at forthcoming announcements concerning a new project related to 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 stated.