Table of Contents
- Details Of The Announcement
- Participants In The Funding Round
- Recent Growth Driving Investor Influx
- Expanding Its Business
- Regulatory Headaches
Crypto exchange group FTX has announced that it has raised $420.69 million from its latest funding round. The round comes only months after it had raised $900 million from its previous financing round.
The firm revealed that the new funding would be used to fund the acquisition of new companies and utilized towards regulatory compliance.
Details Of The Announcement
The funding round sees FTX add $420.69 million to FTX’s war chest, which the company plans to utilize towards funding new acquisitions and the launch of new products. The funding round also sees FTX valued at $25 billion dollars.
The latest announcement comes only months after FTX revealed that it had successfully raised over $900 million in its Series B funding round, which valued the firm at $18 billion. The funding is part of a boom being witnessed by the crypto sector, with investors showing significant interest in private companies and backing them with significant funds. This has significantly boosted their valuations, creating unicorns such as FalconX, TradingView, and OpenSea.
Participants In The Funding Round
According to the announcement, the latest funding round includes participation from 69 investors, including Ribbit Capital, Tiger Global, Sequoia Capital, Lightspeed Ventures, and Sea Capital. It also includes funds and accounts managed by BlackRock, while billionaires Israel Englander and Alan Howard had backed the previous funding round.
FTX had also revealed that investment giant Temasek also participated in its Series B round. However, CEO Sam Bankman-Fried remains the majority owner in the firm.
Recent Growth Driving Investor Influx
CEO of FTX, Sam Bankman-Fried, has revealed that new investors are joining FTX’s cap table due to a surge in growth. Open interest in FTX’s bitcoin futures market has seen a surge, soaring to $4 million since May. At that time, open interest stood at $1 billion.
Rival Binance has reported similar numbers. Futures open interest on Binance hit $5.5 billion, and according to Block’s Data Dashboard, FTX accounts for just 37% of Coinbase’s volumes in spot crypto trading. However, Bankman-Fried revealed that the market share has been up significantly since the fundraise.
Expanding Its Business
FTX has also focused on expanding its business interests and has already launched a platform focused on non-fungible token (NFT) trading. It has also purchased LedgerX, a futures platform, for an undisclosed amount.
Bankman-Fried also revealed that the fresh injection of capital would allow FTX to acquire more firms in the short term. He stated that new acquisitions would help FTX expand its product suite quicker, allowing it to offer perpetual swaps to US-based crypto traders. Referring to the acquisitions, Bankman-Fried revealed,
“I would probably guess there will be another three or so,” Bankman-Fried said. “Maybe two small ones ... three moderate to big ones.”
The deals could end up being valued at over $1 billion. FTX is also looking at other products, which include an FTX branded exchange-traded fund. Bankman-Fried elaborated on it a little, stating,
“Whether it is a spot or futures-based ETF, we’d be willing to talk about structured products with partners like BlackRock.”
FTX is not immune to regulatory headaches, as is the case with firms across the crypto-space, with the specter of regulators unleashing their ire looming large. The exchange has recently moved its headquarters to the Bahamas from Hong Kong, is still not allowed to do business in New York.
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