Crypto exchange FTX to raise $1 billion at flat valuation of $32 billion
FTX is reportedly in discussions with a clutch of heavyweights from traditional finance to raise up to $1 billion in fresh funding to fuel more deal-making.
The fresh capital injection, which is still subject to negotiations, would keep the crypto conglomerate at the same valuation it had landed after a $400 million funding round back in January. At the time, the cryptocurrency exchange founded by Sam Bankman-Fried was valued at $32 billion.
Participants in the upcoming round would include existing investors such as Singapore’s Temasek, SoftBank’s Vision Fund 2 and Tiger Global.
Sam Bankman-Fried has been trying to help the stumbling crypto industry with many bailouts of struggling firms announced this year to pull them back from the brink.
The crypto billionaire, who has emerged as the savior of the digital asset industry, is reportedly in discussions to acquire major names in both crypto and brokerage industries. That includes the beleaguered crypto lender BlockFi, South Korean exchange Bithumb, and most recently Robinhood. Bankman-Fried’s quantitative research firm, Alameda Research, also came to the rescue of embattled Voyager Digital.
According to leaked financial documents, global trading revenue generated by FTX hit $1.02 billion in 2021, having increased more than 10 times from the $89 million recorded in 2020. Additionally, FTX’s operating income swallowed to $272 million throughout last year’s bull run from $14 million a year earlier. FTX saw net income of $388 million last year, up from just $17 million in 2020.
CNBC report also states that strong momentum seen in 2021 continued into the first quarter with $270 million in Q1 revenue. However, it was unclear how FTX held up in the second quarter as prices plunged and crypto platforms struggled to maintain momentum during the latest “crypto winter.”
By way of comparison, Coinbase posted a loss of $1.1 billion on revenue of $803 million for the second quarter of 2022. The results amounted to the second consecutive quarterly loss for the publicly traded exchange, which posted $7.4 billion in revenue and $3.6 billion of net income last year.
FTX US also made headlines earlier this year when the exchange has become an investor in New York City-based IEX Group, the eighth largest stock exchange operator globally. The startup took a bet and made a strategic investment in the “Flash Boys” exchange as it aims to leverage its expertise and infrastructure to establish a regulated marketplace for buying, selling, and trading digital asset securities.