Digital Asset Service Providers Searching for Fresh Capital – Coinbase, Kraken, Anchorage
Servicing a nascent sector is a fast-moving game as companies must constantly be improving, offering a better solution than their competitors. This however, is easier said than done – in order to constantly satiate market demands, companies often require recurring rounds of fresh capital to develop their platforms. The following are a few examples of this from companies well known in the digital assets sector.
Capital can be generated in a variety of manner. At this point in its life, Coinbase is turning to a highly anticipated Initial Public Offering (IPO). While we have known for some time that this would soon occur, the company’s S-1 filing with the SEC has just gone public, revealing previously unseen financial data.
As the marquee name within digital assets, it should be unsurprising that Coinbase is expected to have a staggering valuation, to go along with impressive revenues.
Valuation Pre-IPO? $100 billion USD
Retail Users? 43 million
Institutional Users? 7000
Trading Volume? $456 billion USD
Revenue up to 2021? $3.4 billion
The company spoke on how it wants to help digital assets realize their potential in the coming years, giving the sector high praise.
“Crypto has the potential to be as revolutionary and widely adopted as the internet. The unique properties of crypto assets naturally position them as digital alternatives to store of value analogs such as gold, enable the creation of an internet-based financial system, and provide a development platform for applications that are unimaginable today. These markets and asset classes collectively represent hundreds of trillions of dollars of value today.
Similar to the early days of the internet, this evolution will take time, but we expect the cryptoeconomy to expand into the mainstream and touch every individual and business around the world in the coming decades. While we are still in the early stages of adoption, the market value of exchange-traded crypto assets was already approximately $782 billion as of December 31, 2020. Our objective is to drive the growth of the overall cryptoeconomy by serving the needs of all consumers who manage their financial lives on a mobile device, and every institution – large or small – that embraces the emerging internet of value.
We expect our customer base to grow alongside the ecosystem we serve as we continue to support more asset classes and add more products to our platform. Our objective is to bring crypto-based financial services to anyone with a smartphone, a population of approximately 3.5 billion people today.”
If given the green light from the SEC, Coinbase is looking to structure its IPO as a direct listing on the NASDAQ, with the sale of ‘Class A common stock’.
While Coinbase is looking to the public for capital, Kraken is actively looking to raise capital in a funding round through private investors. It is believed that Kraken is hoping to achieve a valuation somewhere between $10-20 billion. If successful, this would be a marked increase from its last funding round, in which it achieved a valuation of roughly $4 billion.
A report from Bloomberg indicates that Kraken has generated interest from the following investment firms.
- Tribe Capital
- General Atlantic
As a popular United States based exchange boasting various designations, Kraken is one of the few companies of its kind that has the potential to stand toe-to-toe with Coinbase. While the latter may boast higher trading volume, Kraken is known to push the boundaries of technology further.
As the first federally chartered digital asset bank in the United States, Anchorage has established itself as an important and intriguing company to watch. Clearly its potential is shining through, as the company has just announced the successful completion of its Series C funding round. Coming in to the tune of $80 million USD, the round was headlined by the following investors
- Blockchain Capital
- Andreessen Horowitz
- Lux Indico
The goal of this particular funding round is to help Anchorage develop solutions which will see the company open pathways for traditional finance to support digital assets.