Crypto Derivatives Exchange FTX Clocks The Biggest Funding In the History of Crypto Markets
Registering a new milestone, crypto derivatives exchange FTX secured the largest private equity round in the history of crypto industry.
On Tuesday, July 20, FTX announced a $900 million fundraise during the series B funding round, at a valuation of $18 billion. Sam Bankman-Fried, the 29-year old CEO of the exchange announced the success as a significant breakthrough for FTX.
According to Sam Bankman-Fried, "The primary goal of the raise was to [find] strategic allies who can help FTX grow its brand."
Nearly 60 investors participated in the fundraising, including Sequoia Capital, Third Point, Lightspeed Venture Partners, Coinbase Ventures, Softbank, Sino Global Capital, Multicoin Capital, the Paul Tudor Jones family, VanEck, Circle, and hedge funders Izzy Englander and Alan Howard.
FTX will be working along with its partners to accelerate further growth for the platform. The funds will support FTX to develop its product offerings and user base further. Besides, it will majorly going towards the acquisitions of existing players in the industry.
Last year in August 2020, FTX acquired the popular crypto portfolio tracking app Blockfolio. It is willing to expand its portfolio further by getting hands on Non-crypto native firms, trading shops, NFT platforms.
Bankman said: "any of those are businesses where we think we have a lot of value to add, implementing the tools that we've built, and frankly, in some cases, us implementing what they've built.”
A common assumption of the general public is that FTX could be heading to Wall Street in its next move. This is an increasingly preferred trend by various crypto startups. Recently Coinbase listed its shares on Nasdaq, becoming the first major firm in the industry to do so.
Bankman-Fried founder and CEO commented: ”This is something we're going to be actively thinking about and we don't know how this is going to end exactly. 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. There's no "ticking clock on our need to go public."
Formed just two year back in May 2019, FTX has managed to grow at a rapid space despite the strong competition from giants like Binance and Coinbase. It did this by differentiating itself from competitors in terms of offering advanced and sophisticated investment instrument to inexperienced players.
Over the last year, FTX’s valuations have skyrocketed 15x times and currently stands at $18 billion. The crypto derivatives platform clocks over $10 billion in daily trading volumes. FTX’s revenue has grown tenfold itself since the beginning of 2021 and a whopping 75 since since the Series A funding round in mid-2020.
Binance, which made a strategic investment in FTX in December 2019 was absent during the current funding round. Rather, Binance CEO Changpeng Zhao confirmed that they have completely given up their equity stake in FTX. CZ called this withdrawal as part of “a normal investment cycle”.
“We’ve seen tremendous growth from them, we're very happy with that but we’ve exited completely. We're still friends but we no longer have any equity relationship,” he said.