Why we invested in Valinor

The Venture Dept. is proud to share our investment in Valinor, a modern credit institution building the infrastructure for on-chain private credit. Castle Island Ventures led the $25M seed round, with additional participation from the crypto arm of Susquehanna, Maven 11, and the founders of TeraWulf. You can read coverage of the announcement in Fortune.

Valinor is reimagining what a credit institution looks like in the digital age. The company uses programmable money, smart contracts, and shared ledgers to underwrite, structure, execute, and monitor credit transactions, doing the job of a private credit firm but natively on-chain. Its initial focus is asset-backed working capital lending to tech-native borrowers: fintechs, payment companies, and crypto businesses that generate real, verifiable digital cash flows but remain underserved by traditional credit markets. Longer term, Valinor envisions a world in which credit transactions move entirely onto internet-native ledgers, what they call "Open Credit," expanding the addressable market and not just making existing processes more efficient.

Here's why we invested.

1. Bridging institutions and on-chain credit.

There is a large and underserved market at the intersection of institutional finance and on-chain credit. Institutional investors want exposure to on-chain lending, the yields are attractive and the asset quality is real, but the tools, infrastructure, and credibility required to access it safely have not yet existed. Valinor is building that institutional access layer. By combining rigorous credit underwriting with blockchain-native execution, the company makes on-chain lending investable for capital that has historically had no clean path in. That is a gap that needs to close for on-chain credit to scale, and the timing, as institutional adoption of digital assets accelerates, is right.

2. Credit is the next institutional frontier.

Stablecoins and tokenization have already brought institutions meaningfully on-chain. Tokenized money market funds, treasury products, and deposits have demonstrated that traditional finance is willing to engage with programmable networks when the infrastructure is trustworthy and the regulatory path is legible. Credit and lending are the logical next step, and the on-chain credit market has already shown durable product-market fit through platforms like Aave and Compound. What has been missing is a purpose-built institution that can sit at the intersection of those DeFi primitives and the institutional capital that wants access to them. Valinor is built to be that institution.

3. A team built for this specific problem.

I've spent enough time at the boundary of traditional finance and crypto infrastructure, both as a regulator and as an investor, to know how rare genuine dual fluency is in this space. Most people who come from institutional credit understand the underwriting but not the world of DeFi. Most people who come from DeFi understand the protocols but have never managed a credit book or worked through a borrower default. Connor Dougherty and Lily Yarborough can speak both languages fluently. They started as banking analysts, moved into private credit at Blackstone, spent time inside a crypto-native fund, and built Valinor from there. In a category that requires credibility on both sides of the table, that combination is the core product advantage.

We're thrilled to partner with Connor and Lily as they build the credit institution for the digital age.