San Francisco-based exchange Kraken is planning a private offering in a transaction that values the company at $4 billion. That figure is exactly half the current valuation of its competitor Coinbase.
In a letter sent to investors, the company stated that it was profitable and “sitting on significant reserves”. The intention of fundraising during this latest round is to build a “war chest for acquisitions in the bear market.” As a first step, the exchange has sent an online survey to investors.
Crashing cryptocurrency markets have adversely affected startups in the space as the value of their tokens, which were used to fund operations, fell. Steemit, a social media platform, laid off 70% of its staff while NYC-based ethereum studio ConsenSys’ was forced to decrease its headcount by 13%. Coinbase had also referenced raising money to build a war chest during its $300 million fundraise in October.
In January this year, Kraken acquired Coinsetter and Cavirtex to bolster its presence in the US markets. (The exchange is among the most popular exchanges in Europe and accounts for the highest trading volumes between the euro and bitcoin). Powell told Coindesk that it would look for companies “more along” the lines of its past acquisitions. “..anything that would have strong synergies with our existing product/service offerings and with great teams,” he said and added that there would an announcement related to this topic in the beginning of 2019.
According to Crunchbase, Kraken has raised, at least, $11.5 million in four funding rounds so far. (The funding amount for the last round by Tokyo-based Money Partners Group was not disclosed but is believed to be in the multimillion dollar range). Among prominent investors of the company are the Digital Currency Group and Roger Ver.