Coinbase Just Got USD 300 million for Competition Fights
Cryptocurrency exchange and wallet Coinbase is now officially valued at USD 8 billion following a mega funding round, the company announced Tuesday. The round was led by Tiger Global Management and infused the company with USD 300 million to accelerate its global expansion, according to the exchange.
The news may not come as a complete surprise to many, as it was already rumored that Coinbase was in talks with Tiger Global, as Cryptonews.com previously reported. Tiger Global is certainly not a new face on the block: the 16-year-old New York-based firm has often invested sizable sums in late-stage companies like Spotify, Ola and Flipkart.
The funding round also included Y Combinator Continuity, Wellington Management, Polychain and Andreessen Horowitz, and its new valuation puts Coinbase among the ranks of the world’s most valuable startups.
Meanwhile, according to a document reviewed by Bloomberg, Coinbase is also projecting revenue for the year of nearly USD 1.3 billion. Reportedly, this number comes from the commissions on trades on its platform, as well as from gains and losses in its own crypto holdings. “Because the firm looks at several internal measures of revenue, the exact figures can vary,” Bloomberg states. The same document shows that in 2016, Coinbase’s revenue was just USD 17 million, as the company recorded a net loss of USD 16 million. By 2017, however, the company had recorded a profit of USD 380 million. It is now projecting that number will be USD 456 million in 2018.
The trend of traditional investors coming into crypto is nothing to fear, Asiff Hirji, COO of Coinbase, says. “Coinbase is, and will remain, a crypto-first company. More than anything, we’re proud of the millions of people that have turned to Coinbase as their entry-point into crypto. We take that responsibility very seriously,” he adds, explaining, “We see Coinbase’s growth as validation that the ecosystem will only continue to grow in size, influence and impact — ultimately ushering in a more open financial system for the world.”
Also, as previously reported, it's no wonder that investors are interested in Coinbase, which is expanding aggressively all over the world. Recently, the company announced that it's launching a new and simplified process for getting exposure to major cryptocurrencies. Moreover, also in September, Coinbase announced a new and expedited listing process for new digital assets on its platform, saying it plans to “rapidly list all assets” that meets its standards. While in May, the company agreed a deal to buy a peer-to-peer (P2P) trading platform for ERC20-standard coins for an undisclosed amount, with a view to enabling trading for overseas customers. At the same time, the company is expanding in Europe and is preparing to enter Japan.
In an overview of Q3 Armstrong said that his company invested in nine more companies, including: Horizon Games, a developer of blockchain-powered video games, Coinmine, a cryptocurrency miner, and Public Market, a protocol for marketplace e-commerce.
However, Coinbase faced some failures, too. For example, in October, the company decided to shut down its still relatively new Coinbase Index Fund, citing lower-than-expected demand from retail.
In either case, the company shows its optimism regarding the future of cryptocurrencies.
“In the next 3 to 5 years, you will see countries going into economic crisis [...] you could see the organic adoption of cryptocurrencies,” Brian Armstrong, CEO and co-founder of Coinbase, said in August. While in June, he said that people are needlessly worried about the current dip: “It can be scary the first time you see it, but to us who have been in the industry for many years, it feels like old news.”