Coincover raises $30M to protect digital assets from cyber theft

Coincover has received $30 million in funding from Foundation Capital. The digital asset protection firm has demonstrated a sturdy resolve to prevent the loss of digital assets through cyber theft or human error.

It aims to completely remove all traces of hacks and digital asset theft from their digital stores. The new funding generated will be poured into deft talent acquisition, products upgrade, and additional collaborations to provide durable protection against crypto hacks or human error.

David Janczewski, CEO and co-founder of Coincover, was interviewed exclusively by TechCrunch. “We’ve reached an inflection point in the industry; as a result, we’ve seen demand for our product increase dramatically,” he said. 

“We made this investment not in spite of the tumultuous year in crypto but precisely because of it,” Charles Moldow, general partner at Foundation Capital, told TechCrunch. “One of the most significant limitations to digital asset adoption, at both the individual and institutional levels, is the fear of loss or theft of assets.”

Established in 2018, Coincover, which was eventually launched in 2019, has attracted funding of over $41.6 million to date. Its initial investors include Valor Equity Partners, Volt Capital, Avon Ventures, DRW Venture Capital, SMT Digital, Element, FinTech Collective, and Susquehanna International Group, as revealed in a post on its official website.

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Hedge funds, family offices, banks, and cryptocurrency firms like BitGo, Fireblocks, and Bitso are just a few of the over 300 companies that Coincover works with. Disaster Recovery and Theft Protection, the company’s two major products, are created to prevent loss and theft for anyone working with digital assets.

“The opportunity is already vast today — crypto is a $1 trillion asset class, yet the digital asset protection industry remains minuscule, and billions were stolen in the last year alone,” Moldow said. “Beyond the dollar amount is the enduring stigma of having suffered a breach — digital asset providers must avoid this at all costs, so the willingness to pay is very high.”

Following the unexpected disaster that was FTX’s bankruptcy, interest in Coincover has skyrocketed. Janczewski noted.

“All companies are concerned with losing access to their crypto and want to protect their end users’ funds from being stolen,” Janczewski said

“For our customers, private key backup provides an additional layer of protection that enables the recovery of assets if they lose their keys or their platform becomes unavailable. We’ve also seen a sharp increase in demand for seed phrase backup, where we provide a route to recovery of funds.”

Coincover’s target 

According to Janczewski, as the crypto space becomes more crowded with more people, there have been numerous attacks, and the industry needs to respond. 

“All companies need to invest in mechanisms to protect themselves, their staff and their end users,” he added. “Businesses will often have an independent third party to help them back up their data or protect against malware, for example. So, in that sense, what we’re doing isn’t revolutionary — it’s almost compulsory.”

For Coincover, it’s about “tackling the next frontier of risk, which is social engineering. If someone’s convinced you to send a lot of money and you’ve done it, it’s considered a scam, not theft,” Janczewski said.

“In traditional finance, banks are not able to refund users when they have willingly sent funds in this way even if you have been duped. At Coincover, we’re working on solving this problem by leveraging the power of blockchain technology combined with our own risk data.”

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