Bakkt Raises Monster Round And Makes Hires

Bakkt, a startup that aims to develop infrastructure for cryptocurrencies, has announced a funding round of $182.5 million, one of the biggest such rounds for a cryptocurrency startup, from an array of investors. The investors include well-known names in cryptocurrencies, such as Pantera Capital, and established firms, such as Microsoft’s venture investing arm, and Boston Consulting Group. Bakkt did not disclose details on how it intends to spend the funds. 

But Kelly Loeffler, the firm’s CEO, wrote that it is “focused on opportunities to provide new infrastructure, including the industry’s first institutional grade regulated exchange, clearing and warehousing services for physical delivery and storage.” Bakkt is owned by Intercontinental Exchange (ICE), the world’s biggest operator of trading exchanges. It was expected to launch a bitcoin futures trading platform during the second week of December last year. But the company postponed its start date due to “the work required to get all the pieces (for a bitcoin futures system) in place.”

Bakkt is also growing its team, according to a report in online publication The Block. The startup added three new team members for technical roles in December. They are head of technology Balaji Devarasetty, technical product manager Jide Laoye, and product engineering director Peter Lee. 

Since its launch last August, Bakkt has generated headlines for being the biggest player to enter cryptocurrencies. Its entry is widely expected to make cryptocurrencies accessible to mainstream investors, who could boost liquidity and trading volumes for bitcoin. 

In her Medium post, Loeffler compared the emergence of blockchain and cryptocurrencies to the commercialization of the Internet during the 1990s and the cell phone revolution of the 1980s. But she cautioned against unrealistic expectations. “While access to information as technology innovation occurs is extremely valuable, the risk is a “marking to market” of innovations before they have a chance to mature. Few innovations have reached their full potential in their first decade of development,” she wrote.

Still venture capitalist and investor enthusiasm for blockchain and crypto-related startups remains undimmed. According to Pitchbook data, they spent $2.2 billion in funding blockchain and crypto startups.