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In its first major crypto investment, major banking sector capital firm Citi Ventures co-led startup incubator Accel with a $6 million investment round in crypto investment wrapper company Xalts, Bloomberg reported.

“We are launching multiple fund products linked to digital assets, including mutual funds and ETFs listed on several global exchanges. We are also leveraging our technology platform to partner with several asset management firms and staking infrastructure providers to jointly launch and manage mutual funds and ETFs,” Xalts COO Supreet Kaur told The Block via Telegram.

Xalts’ founders hail from investment backgrounds, with Chief Investment Officers boasting institutional trading experience at HSBC, Lehmon Bros, and Nomura. Likewise, Kaur brings crypto experience with previous work for Meta.

The company began with the idea of wrapping digital assets into investment products fit for institutional investors, the company said on Twitter. However, would-be institutional investors face numerous barriers in terms of tax treatment, technological burdens, as well as due diligence for legal and regulatory due custodians and credit layers, and more according to Kaur.

“In spite of having the risk appetite to invest in crypto,” Kaur said many institutional investors face too many initial barriers, accounting for which can cost “millions of dollars in budget and headcount approvals, just to get started.”

Xalts is developing several other products, collaborating with ecosystem players, according to Kaur, including “a structured product and repackaging platform which will allow institutions to issue structured notes with embedded crypto options.”

Citi and Accel are joined in the round by web3 investor AGBuild, and individual investors including Polygon Co-founder Sandeep Nailwal, Coinbase Lead Product Manager Nakul Gupta, and OYO Global Chief Strategy Officer, Maninder Gulati.

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