Birch Hill, a New York-based startup founded by former Goldman Sachs and BlackRock employees, has closed a $4 million seed round to develop onchain credit infrastructure for U.S. apartment, agriculture, and energy loans.
The round was led by Multicoin Capital, with participation from ParaFi Capital, Castle Island Ventures, and Nascent. It brings Birch Hill's total funding to $6.5 million.
Leadership and divisions
The firm is led by CEO Bhavin Vaid, a former Goldman Sachs investment banking analyst who later worked in private equity at Cerberus Capital Management and co-founded crypto investment firm Halo Capital. Co-founder and COO Connor Flanagan spent more than four years at BlackRock, including on its Aladdin risk platform, before roles at Digital Currency Group and analytics firm Flipside.
Birch Hill operates in three divisions. Its Vaults arm is an official curator on Morpho, an onchain lending protocol, where it assesses credit and sets risk parameters for vaults and markets. Its Strategies unit builds onchain credit products, including a strategy called Birch Hill Absolute Value. Its Enterprise division has applied to FINRA for broker-dealer membership, which would let it place private credit offerings with verified accredited investors.
"Loan originators need new sources of capital, and onchain lenders need credit they can trust," Vaid said in a statement.
Long-term securitization plans
Longer term, the firm plans to securitize pools of U.S. multifamily, agriculture, and energy loans designed to be held onchain within the U.S. regulatory framework. Birch Hill said it met with the SEC's Crypto Task Force in August as part of that effort. It argues that banks, insurers, and other fiduciaries will only allocate to credit packaged in structures they recognize.
The round funds an eight-person team that includes three hires from vault platform Yearn: Brad Schlagel, who led development of Yearn v3, Ian Plosker, and Alex Cornwell. Traver Normandi joins from risk management firm Gauntlet to lead business development.
"Private credit is a fragmented, relationship-driven market, which makes it one of the clearest opportunities to build new financial infrastructure onchain," said Shayon Sengupta, general partner and co-head of venture at Multicoin.
Regulatory backdrop
The raise comes as Washington warms to onchain finance. The SEC proposed Regulation Crypto Assets in August, which would let projects raise money through token sales without full registration. Morpho has also gained traction with traditional players, powering Coinbase's fixed-rate USDC loans against Bitcoin.
