Largest ever private crypto deal goes through

Antigua-based crypto derivatives exchange FTX closes a record fundraiser of $ 900 million at a valuation of $ 18 billion. The deal is likely to increase the net worth of its billionaire founder and CEO, Sam Bankman-Fried, by nearly $ 8 billion.

VSThe rypto FTX derivatives exchange has just raised the biggest round of funding in the history of the industry, almost doubling the previous record. Today, FTX Trading Ltd., owner and operator of the Antigua Stock Exchange, announced the $ 900 million Series B fundraiser at a valuation of $ 18 billion – a milestone for FTX, which does not was only worth $ 1.2 billion a year ago.

In total, over 60 investors participated in the fundraiser, including Paradigm, Sequoia Capital, Ribbit Capital, Third Point, Lightspeed Venture Partners, Coinbase Ventures, Softbank, Sino Global Capital, Multicoin, the Paul Tudor Jones family, VanEck, Circle and the Izzy hedge funds. Englander and Alan Howard. Instead of relying on an investment banker to run the round, the FTX team worked directly with investors Paradigm, Ribbit and BTIG to close the deal.

A relative laggard among cryptocurrency exchanges, FTX, launched in May 2019, has differentiated itself from industry giants like Binance and Coinbase by offering even inexperienced traders advanced features and sophisticated investment products, including including options, futures, volatility products and leveraged tokens. FTX averages over $ 10 billion in daily trading volume; He has increased his income tenfold this year and 75 times since his Series A round of funding, which closed in mid-2020, according to a company statement.

“The main objective of the increase was to [find] strategic allies who can help FTX grow its brand, ”but the capital itself will be mainly used for acquisitions, said Sam Bankman-Fried, founder and CEO of the 29-year-old exchange. Native non-crypto businesses, trading shops, NFT platforms, – “all of these businesses are businesses where we think we have a lot of value to add, by implementing the tools we’ve built, and frankly, in some cases we let’s implement what they’ve built, ”he adds. Funding will also go to expanding globally and accelerating growth.

Binance, the world’s largest cryptocurrency exchange in terms of market volume, is particularly missing from the list of investors, which is currently under scrutiny by financial regulators around the world. In December 2019, he made a strategic investment of an undisclosed amount in his young peer. Binance CEO Changpeng Zhao (commonly known as CZ) said Forbes the company recently gave up its stake in FTX: “We have seen tremendous growth from them, we are very happy with it but we have pulled out completely. He explains the withdrawal as part of “a normal investment cycle” and says it ended on good terms: “We are still friends but we no longer have any equity relationship.

FTX now has over one million registered users, ranging from retail investors to sophisticated day traders, family offices and experienced institutional traders. This rapidly growing popularity could also be attributed to the multiple high profile sports sponsorships it has entered into this year. In March, FTX secured a 19-year naming rights deal on the original NBA Miami Heat arena for $ 135 million – the first time a cryptocurrency exchange has sponsored a sports venue. professional in the United States Last month, the company entered into multi-year brand partnerships. with TSM esports organization and Major League Baseball (MLB) and named National Football League quarterback Tom Brady as ambassador. Brady’s model wife Gisele Bundchen has taken on the role of Environmental and Social Initiatives Advisor at FTX. Brady and Bundchen both took a stake in the company.

As a result of this investment, Bankman-Fried, whose fortune Forbes estimated at $ 8.3 billion last month, is expected to grow his wealth by at least $ 7.9 billion to $ 16.2 billion, as a result of the deal, cementing his title as the most crypto billionaire rich known. However, as the price of bitcoin has fallen 3% in the past 24 hours, taking much of the crypto market with it, this wealth could be short lived. He owns 58% of the shares of the company. In August 2020, FTX acquired Blockfolio, a popular portfolio tracking app, for $ 150 million.

Many will also wonder if FTX could position itself for a public debut, a path increasingly favored by crypto startups. In April, Coinbase listed its shares on the Nasdaq, becoming the first major company in the industry to do so. Following the example, digital infrastructure provider Circle and a launching cryptocurrency exchange, Bullish, recently announced plans to enter public markets as well.

“It’s something we’re going to be actively thinking about and we don’t know exactly how it’s going to end. So what we want to do is put ourselves in a position where we can do it if we want to [and] we are ready, ”says Bankman-Fried. There is no “clock on our need to go public”.