Why we invested in Hyperithm, a private digital asset manager
Institutional interest in cryptocurrency is growing rapidly and large scale investors and private money managers entering the digital asset world need a secure trading platform.
Hyperithm has the solution. The digital asset brokerage and management services company is dedicated to institutional investors, publicly traded companies, high net-worth individuals, and crypto funds and exchanges. The company’s assets under management and brokerage volume have been growing rapidly as cryptocurrency goes mainstream.
We invested in Hyperithm because of the company’s strong growth trajectory and its team of founders. Sangrok Oh, co-CEO and co-founder, has investment banking and private equity investment experience. Lloyd Lee, co-CEO and co-founder, is a serial entrepreneur and gained crypto trading experience in Japan. Woojin Kim, CTO and co-founder, is an experienced blockchain developer and previously worked at a cryptocurrency exchange based in Hong Kong. The engineering team at Hyperithm also includes a number of international math/physics/informatics medalists from the Science Olympiad.
Hyperithm uses automated trading and risk management algorithms developed in Rust, a statically-typed programming language designed for performance and security. The company — which has offices in Seoul and Tokyo — has a well-established track record managing digital assets in Korea and Japan.
Hyperithm’s platform has evolved in step with the growth of institutional demand in East Asia. But the real growth of the market has yet to come. The immediate opportunity for Hyperithm is strengthening its penetration in the East Asian market, worth over $150 billion. Beyond that, the total addressable market worldwide is estimated at more than $400 billion.
A recent study by Fidelity found that 91% of institutional investors in the U.S. and Europe will allocate some portion of their portfolio to digital assets within the next five years. Moreover, the U.S. Security and Exchange Commission’s recent approval of bitcoin futures ETF trading is expected to fuel growth of the institutional market.
Another reason we invested in Hyperithm is that its $11 million Series B round was led by two of its former clients, Hashed and Wemade Tree. Other investors in the latest round include Coinbase Ventures, Cocone, GS Futures, and Guardian Fund. Hyperithm's Series A funding round was led by VIP Research & Management, with participation from the venture capital arms of Kakao and Naver, two large Korean tech companies.
Hyperithm’s experience should help it navigate a rapidly changing regulatory environment. For instance, the company is evolving compliance strategies in the heavily regulated Korean financial services sector. In fact, Hyperithm is the only brokerage service firm in Korea that has applied for registration as a Virtual Asset Services Provider.
The growth of the institutional market for digital assets in East Asia is just the beginning for Hyperithm. The company’s ability to help bring digital assets into mainstream capital markets bodes well for its prospect of becoming a global financial institution.
Amy Lee is an Investor at Samsung Next. Samsung Next's investment strategy is limited to its own views and does not reflect the vision or strategy of any other Samsung business unit, including, but not limited, to Samsung Electronics.
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