Crypto derivatives exchange FTX has completed a series B fundraising round of $900 million FTX, a cryptocurrency derivatives exchange, has closed a $900 million series B funding round, valuing the business at $18 billion.
According to a statement from the business, investors in the round included SoftBank Group Corp., the Paul Tudor Jones family, Alan Howard, Coinbase Ventures, and Sequoia Capital. The round included more than 60 investors, according to the statement, including Paradigm, Thoma Bravo, Ribbit Capital, Insight Partners, Third Point, Lightspeed Venture Partners, Altimeter, BOND, NEA, Willoughby Capital, 40North, Senator Investment Group, Sino Global Capital, Multicoin, Izzy Englander, VanEck, Hudson River Trading, and Circle.
There wasn’t a traditional single lead investor in the process because FTX managed the investment round primarily on its own and worked with all the partners, according to Chief Executive Officer Sam Bankman-Fried.
The hike has two key objectives, according to Bankman-Fried, 29. One of them is simply creating numerous ties with individuals we are really enthusiastic about and who we believe can help us build our business and establish numerous connections. Having additional funds available for M&A is the second component.
According to Bankman-Fried, the acquisitions would probably be made through the private market, and the firm was relatively flexible regarding the price range, with potential targets ranging from $5 million to $1 billion.
In the investment round, FTX’s valuation came in slightly below the $20 billion Bankman-Fried had previously predicted to Nikkei Asia.
According to Bankman-Fried, FTX has stated that it is not in a hurry to go public, and this increase just serves to confirm that. However, he stressed that the prospect of a listing is still a consideration.
We’re still working to put ourselves in a position to be able to rapidly go public if we choose to, he added. But that doesn’t imply we believe this is the right time to take action. Instead, we merely want to have that choice if it does seem appropriate, without having any imminent plans to use it.
FTX debuted in the beginning of 2019. According to data from Skew.com and CoinGecko.com, it is now the second-largest cryptocurrency derivatives exchange by 24-hour open interest. It is the fifth-largest Bitcoin futures exchange in the world. It only recently joined the ClearLoop settlement trading network of Copper.co, which will give it new access to institutional money.
The exchange also aims to increase awareness through American professional sports. The naming rights to the Miami Heat basketball team’s home court were purchased by FTX, and the company also signed a long-term collaboration with the famous pair Tom Brady and Gisele Bündchen. FTX also sponsors Major League Baseball.
In an interview last month, Bankman-Fried, who entered the cryptocurrency industry after working for Jane Street Capital’s quantitative trading division for three years, stated that although his company has no immediate plans to go public, “it’s something we’d be silly not to be doing our due diligence on,” and that he has been contacted by SPAC sponsors. FTX is lucrative, he continued, so there was no pressing reason to take this action.
This investment round was announced shortly after Coinbase Global Inc.’s direct listing in mid-April, which soon followed Bitcoin’s all-time high price of close to $65,000. As of Tuesday, Coinbase has a market value of $46 billion. Bullish, a company getting ready to build a cryptocurrency exchange, has agreed to merge with Far Peak Acquisition Corp. for $9 billion in a special purpose acquisition company, with a $75 million investment from a SoftBank division. Additionally, Circle, the company behind the USDC stablecoin, is getting ready to list itself in a $4.5 billion SPAC offering.
The transactions are taking place as cryptocurrency prices are trading far below their recent highs. With the price of bitcoin trading at less than half its all-time high on Tuesday, it is now below $30,000. According to CoinGecko, the entire market value for cryptocurrencies is currently about $1.2 trillion, down from a level close to $2.6 trillion in early May.