Kraken Sticks to USD 4 Billion Valuation, Raising USD 10m From Clients
San Francisco-based cryptocurrency exchange Kraken, one of the top 50 cryptocurrency exchanges by trading volume, aims to raise USD 10 million by selling 0.255% stake in the company to their customers, which puts valuation of the company at almost USD 4 billion.
At pixel time, the company managed to raise more than USD 7,4 million from 470 investors, while another 29 days left to raise the remainder.
"We are always looking for ways to democratize access to our equity, allowing more of our valued clients to become valued investors," the exchange tweeted yesterday. For this capital raise they have partnered with BnkToTheFuture, an online investment platform.
Kraken is offering equity to vetted investors, and all its users qualify with a minimum purchase of USD 1,000.
This move was criticized, however, as some people thought it hypocritical that the exchange wants to democratize, but only accredit users are allowed.
Only for accredited investors. Keeping the rich rich and the poor poor. Doing the exact opposite of what investing in crypto is all about.— CryptoZee (@thinkcryptozee) 20 May 2019
Others have replied, though, that everybody can do a self-accreditation by completing a quiz.
Kraken CEO Jesse Powell, the person in charge of the BnkToTheFuture pitch, described Kraken as one of the leading and oldest global fiat exchanges, ranked Top 5 in legitimate volume, as he says, with funding in 5 fiat currencies, while trading in 24 crypto assets and 74 trading pairs. He also noted that Kraken has over 4 million clients in nearly 200 countries, and having USD 85 billion in 2018 trade volume. The company did not provide any other financial details in public. Kraken did not respond to a request for comment.
Meanwhile, the exchange made an offer to select investors last year, presenting them with the opportunity to purchase its shares but, unlike asking for smaller investments like this time around, last year’s minimum was USD 100,000 in a USD 4 billion valuation round. And in February 2019, the exchange reportedely was “on the cusp of completing a USD 100 million funding round financed by its larger customers.”
In comparison, competing cryptocurrency exchange and wallet Coinbase was officially valued at USD 8 billion following a mega funding round in October 2018.
In late April, Cryptonews.com reported that Kraken could be looking into strengthening their position in the United Arab Emirates.