Valinor, an onchain private credit platform, has raised $25M in seed funding led by Castle Island Ventures. The company automates traditional private credit processes, such as revolving credit lines, using smart contracts on blockchain. Backers include Susquehanna Crypto, Maven11, and founders of TeraWulf. The capital will expand lending activities and team growth beyond its current six employees.
RWA Tokenization Accelerates to $24B
The raise arrives as the real-world asset (RWA) tokenization market reaches $24B, up 380% since 2022, with private credit emerging as the dominant category. Institutions like BlackRock have launched tokenized funds, such as the BUIDL Treasury fund in 2024. Valinor's focus on institutional-grade onchain credit positions it amid this convergence of TradFi and blockchain. Ex-Blackstone founders bridge manual finance with automated smart contracts.
Spreadsheets Slow Private Credit Flows
Private credit manages $1.7T to $3.5T in assets under management as of 2024. Yet manual operations rely on PDFs, spreadsheets, emails, and human wire transfers, fragmenting capital deployment. Deployment grew 78% year-over-year to $593B in 2024, but inefficiencies persist in monitoring and enforcement. Borrowers in fintech and crypto already receive Valinor loans, highlighting real-world pain points.
Smart Contracts Automate Loan Logic
Valinor replaces these manual steps with stablecoins for instant transfers and smart contracts encoding drawdown rules and payment waterfalls. AI integrates with onchain data for real-time risk management, surpassing lagging traditional models.
As co-founder Connor Dougherty explained:
“Especially at a private credit firm, you’ve always had someone who’s actually pushing the wire button.”
This automation targets revolving credit, already deployed to fintech and crypto firms.
Castle Island Bets on TradFi Bridge
Castle Island Ventures sees Valinor as a translation agent between crypto and private credit industries. Sean Judge from the firm noted the team's potential to merge these worlds. Participation from Susquehanna Crypto and Maven11 signals conviction in onchain infrastructure for real economy lending. Apollo's involvement adds strategic weight from a private credit giant.
Private Credit Market Scales to $3.5T
Private credit assets stand at $3.5T, projected to reach $2.64T in deployment by 2029. Onchain RWAs grew from $15B in 2024, with projections to $30T by 2034. Competitors like Centrifuge, Maple Finance, Goldfinch, and Credix focus on tokenization and decentralized lending. Valinor's ex-Blackstone expertise differentiates in serving institutional lenders and borrowers.
Ex-Blackstone Team Drives Credibility
Co-founders Connor Dougherty and Lily Yarborough hail from Blackstone's GSO Capital Special Situations group, specializing in distressed credit. They led NovaWulf Digital Management, which bid as stalking horse in the 2023 Celsius bankruptcy. VP Bruno Salemme brings FBI white-collar crime investigation experience plus cybersecurity training. This blend equips Valinor for compliant, secure onchain finance.
Expanding Real Economy Lending
With initial loans issued, Valinor plans to scale to broader real economy credit scenarios. The seed funding supports hiring and larger lending pools. Panels at Avalanche Summit and Consensus 2025 underscore partnerships in the RWA ecosystem.