As a lot of analyst and industry veterans have been speaking about the real growth and maturing of crypto businesses despite the drastic fall in crypto prices which began at the start of this year. Well here is news piece that just reaffirms that. According to the latest news reports, the latest round valuation considers Coinbase a USD 8 billion company.
Coinbase valuation multiplies significantly in a years’ time
According to the latest news reports, Coinbase is closing a deal that values the six-year-old cryptocurrency trading platform at $8 billion. According to sources, the company is raising a $500 million funding round that will likely include existing investors and a new investment from hedge fund Tiger Global.
Coinbase which is at the core of the crypto craze and provides one of the leading platforms to exchange cryptocurrencies like Ethereum, Bitcoin, and Litecoin, was most recently valued at $1.6 billion with a $100 million funding round in August 2017, making it a first crypto unicorn. The exchange than had raised $100M in Series D funding led by IVP, with participation from Spark Capital, Greylock Partners, Battery Ventures, Section 32 and Draper Associates. This last round (Series D) of funding was just before the crypto bull run began which took the Bitcoin prices to USD 20000.
The current round of funding that is coming in from Tiger Global, despite the dramatic dip in value in some of the platform’s cryptocurrency offerings this year, considers Coinbase as profitable.
Coinbase apart from being a leading crypto exchange has emerged as one of the most prolific acquirers in the crypto sector, with a string of deals designed to bolster its services and fulfill its ambition of creating a one-stop shop that brings crypto to the masses. So far, most of Coinbase’s acquisitions have been relatively small, but a hefty new round of funding could give it significant firepower on the M&A front.
Tiger Global is a massive New York-based investment firm that gravitates toward these big deals in consumer-facing brands across the world. They have yet to show much interest in cryptocurrencies, however, which despite budding Silicon Valley interest still has room to grow with mainstream investors.
VC’s attraction towards the crypto business signals long-term growth of the crypto Industry.
The investment from VC’s into crypto businesses like Coinbase is a clear sign that they believe in the future of the industry. The same was put forward by Joseph Young who also said the VC’s believe in the long-term growth of the crypto industry.
Quite spectacular that Coinbase, the world’s largest fiat to crypto exchange, quadrupled its valuation from $1.6 billion to $8 billion within 1 year in a bear market.
It shows investors and venture capital firms really believe in the long-term growth of the crypto market.
— Joseph Young (@iamjosephyoung) October 3, 2018
As the crypto business continues to flourish and mature they are slowly catching eyes of traditional investors like Venture Capitalists and Private Equities. According to a recent Diar report published on September 30, showed “Traditional” venture capital (VC) investment in blockchain and crypto firms has almost tripled in the first three quarters of 2018.
Diar cited data from Pitchbook that indicated that blockchain and crypto-related firms have raised almost $3.9 billion in VC capital in so far this year — a 280 percent rise as compared with last year. The rise comes not just in terms of an increasing number of deals, but also in the burgeoning median value of each, which has grown by over $1 million this year.
The combined total of the ten largest deals in 2018 came to $1.3 billion, with nine of these representing traditional equity investments, rather than purchases of utility crypto tokens. The outlier was the DFINITY token, which raised a combined $163 million from VC investors Andreessen Horowitz, Hashed, and Polychain Capital.
Lastly, Diar also analyzed the geographic distribution of the VC capital that flows into the blockchain, with U.S.-based investors representing the lion’s share at 79 percent, followed by 12 percent from China, and 2 percent from South Korea and Singapore respectively.
Venture Capitalists are usually cautious investors and focus of business that significantly multiplies wealth and their increasing investment does say the real crypto businesses are growing. Growing Venture Capital investment in cryptocurrency is also a real positive sign for cryptocurrencies and industry as whole signifying cryptos and blockchain are here to stay.
Will the crypto business be able to multiply wealth for Venture Capitalist? Do let us know your views on the same.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.