Crypto Lending Firm Morpho Bags $50M in Funding Round Led by Ribbit Capital

Morpho did not disclose the valuation of the funding raised through a private token sale.

Morpho had previously raised $18 million in 2022, when the DeFi firm’s CEO, Paul Frambot, was in his third year of college.

Decentralized crypto lending protocol Morpho has raised $50 million in a strategic funding round led by Ribbit Capital, an early-stage investor in fintech firms such as Robinhood, Revolut and Coinbase.

The private token sale also saw participation from notable names such as a16z crypto, Coinbase Ventures, Variant, Pantera, Brevan Howard, BlockTower, and Kraken Ventures. Morpho’s valuation based on the funding was not disclosed. The company raised $18 million in funding in 2022, when CEO Paul Frambot was in his third year of college.

The goal here is to take the relatively rare and introverted world of decentralized finance (DeFi) and merge it with the underlying protocol layers of the internet. Launched two years ago, Morpho has evolved from its role as an optimization layer that improved interest rates for Aave and Compound users (ruffle some feathers in the process) to Morpho Blue, a foundational infrastructure on which others can build crypto lending applications with their own risk management strategies.

“Our goal was always: How do we get out of DeFi?” Frambot told CoinDesk in an interview. “How do we make sure that eventually — maybe not in the short term — we can transform private financial infrastructures into public goods?”

This is where the strategic involvement of Frambot, Ribbit and other fintech backers comes into play, he said, because portfolio companies with massive distribution channels like Robinhood and Revolut can use Morpho to flexibly design lending and borrowing use cases without fragmenting liquidity.

“We need to bridge the gap for DeFi and provide true integration into the fintech world, and Ribbit was an obvious partner for that,” Frambot said. “There are already incredible synergies in what we can achieve together for potential integrations in the real world, and it’s not like the crypto leverage use case, which is obviously most of the use case for DeFi lending right now.”

Other investors participating in the round included Hack VC, IOSG, Rockaway, L1D, Mirana, Cherry, Semantic, Fenbushi, Leadblock Bitpanda and Robot Ventures.