Funding Rounds In Focus — FTX Valuation Rises to $25 Billion
Crypto Exchange FTX has announced the completion of its “meme-funding round“, raising $420,690,000, which saw its value reach $25 billion. This round of investment saw the participation of 69 institutions led by BlackRock, Sequoia Capital, Temasek, Sea Capital, IVP, ICONIQ Growth, Tiger Global, Ribbit Capital, Lightspeed Venture Partners, and the Ontario Teachers’ Pension Plan.
This is the latest indication that blue-chip investors are becoming more enthused about digital assets. The investment is a follow-up to FTX’s Series B fundraising, which secured $900 million at an $18 billion valuation in July.
As one of the leading digital currency exchanges globally, FTX specializes in derivatives and leveraged trading, using borrowed cash to amplify trades. Having sliced a decent share of the crypto market, it also competes with the likes of Coinbase, Binance, and Kraken. Sam Bankman-Fried, CEO of FTX, had this today in the announcement.
“We founded FTX two years ago with the idea of creating a better financial marketplace. Today we are focused on establishing FTX as a trustworthy and innovative exchange by regularly engaging with regulators around the world, and constantly seeking opportunities to enhance our offerings for digital asset investors.
For this round, we capitalized on those strides and were able to partner with investors that prioritize positioning FTX as the world’s most transparent and compliant cryptocurrency exchange.”
Participants in the fundraising also made comments on the news. Alfred Lin, General Partner at Sequoia Capital, praised the crypto exchange and its founder.
“Sam Bankman-Fried is a special founder who is ambitious and daring enough to build the future of crypto by establishing FTX as the global exchange with the best overall product offering and leveraging the world’s crypto rails to build the future of finance. We are thrilled to partner with FTX on their next phase of growth.”
Some crypto proponents have also reacted positively to the news and have shared their sentiments on Twitter.
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Crypto Funding Rounds Are Becoming Increasingly Common
In 2021, venture capital financing for cryptocurrency and blockchain firms had already broken previous records. This year, blockchain firms have already raised over $7 billion — more than any other year of fundraising in history.
Consumer and institutional demand for cryptocurrencies are driving significant investments for companies focused on exchanges, corporate applications, crypto wallets, and custody services. This has allowed institutional bodies to serve as angel investors for these crypto firms providing them with needed funds for their expansion and the development of new products through several fundraising rounds.
Before the announcement by FTX, reports suggested that ConsenSys, a blockchain software company that builds and invests in Ethereum-based projects, was looking to raise $250 million through a funding round that would value the company at around $3 billion.
Republic, another investment firm with a blockchain consultancy arm, announced a $150 million Series B funding round on Tuesday. This comes after it raised $36 million in the Series A round, with a total of over $70 million raised.
Some other prominent fundraising rounds to have occurred in 2021 includes;
- Circle: $440 million, Total amount raised: $711 million.
- BlockFi: $350 million, Total amount raised: $513 million.
- Solana Labs: $314 million, Total amount raised: $336 million
- Fireblocks: $310 million, Total amount raised: $489 million
- Dapper Labs: $305 million, Total amount raised: $386 million
- Blockchain.com: $300 million, Total amount raised: $490 million
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Growing Legitimacy Sees Institutional Investors Turn To Crypto
Institutional investors are turning to cryptocurrency as the growing market now offers several investment options more suited to them, such as ETFs. This growing interest can also be seen in the increasing number of banks providing crypto custodial services, and more financial institutions supporting crypto infrastructure.
The recent performance of Bitcoin cannot be isolated from bullish sentiments seen in the market lately. Record volumes seen in crypto derivative markets and the recently approved Bitcoin ETF are all indicators of the increasing participation from institutional investors in cryptocurrency.
Their increased interest coincides with Bitcoin reaching a new all-time high. Bitcoin made an advance above the $66,000 price level this week before losing momentum. If the market continues to maintain this positive outlook, participation in funding rounds may continue to ramp up.
Do you see crypto institutions becoming a safe-haven investment for venture capitalists? Let us know in the comments section below.