Tech

Peter Thiel-backed crypto broker Bitpanda triples rating

A visual representation of Bitcoin.

STR | Nur Photo via Getty Images

London — European crypto trading platform Bitpanda has raised $ 263 million in a new funding round that rates the company at $ 4.1 billion.

That’s more than three times the value of the $ 1.2 billion Bitpanda in the last private funding round five months ago. With the latest cash injection, the company’s total value is close to $ 500 million.

The investment was led by Valar Ventures, a venture capital firm co-founded by US technology billionaire Peter Thiel. Valar is the third to support Bitpanda since the first major funding round announced in September.

“I don’t like raising money,” Bitpanda CEO and co-founder Eric Demuth told CNBC. “It takes a lot of time.”

“When you have a partner with whom you have a close relationship and they have deep pockets, you don’t have to do the whole roadshow,” Demus said. “I wanted to double down, so I wanted to be with them,” Valor added. “It was a very simple process.”

From left to right, Bitpanda co-founders Christian Trummer, Paul Klanschek, and Eric Demuth.

Bit panda

UK billionaire hedge fund managers Alan Howard and REDO Ventures have also invested in the latest round of Bitpanda, along with existing investors LeadBlockPartners and JumpCapital.

What is a Bit Panda?

Founded in 2014, Bitpanda is a Vienna-based brokerage firm that allows people to buy and sell cryptocurrencies and precious metals. The company also began testing a service that allows users to trade stocks 24 hours a day this year.

“By the end of this year, I think you have a really good stock sale,” Demus said.

Bitpanda is one of the many online brokers in Europe that is gaining increasing investor interest, partly due to the enthusiasm of “meme stock” trading. Retailers have piled up unloved stocks such as GameStop and AMC, inspired by the popular Reddit forums. This has increased trading volumes on digital platforms such as Robin Hood.

Bitpanda’s competitors include Revolut, Trade Republic and eToro.

One way the company wants to differentiate itself from its rivals is to license technology to banks and fintech companies. He didn’t reveal the client’s name, but said that some large companies have already implemented the system and will be able to offer cryptocurrency and stock trading within a few months.

Bitpanda makes money from the spread between the amount someone is willing to pay for an asset and the price at which the asset is sold. According to Demus, the startup has been profitable for five years.

Profitability is rare in FinTech, and many venture companies in this area are losing money. Finally valued at $ 33 billion, Revolut lost £ 167.8 million ($ 232.3 million) in 2020, an increase of 57% over the previous year.

Dems said many fintech companies are raising money with high valuations for “hype” and “fear of oversight.”

“I’m very skeptical about this,” he said. “Many companies, especially in the fintech space, are purely based on a combination of hype and growth, but growth is mostly paid, so there are free products and you’re just buying customers. . “

Bitpanda didn’t provide a breakdown of how much money it makes each year, but said revenue is on track to increase seven-fold in 2021. The platform currently has over 3 million users.

The company operates exclusively in Europe and has offices in Vienna, Berlin, London, Paris, Barcelona, ​​Milan and Krakow. We plan to use this money to expand our business in major markets such as France, Spain, Italy and Portugal.

Cryptography mania

The improvement in Bitpanda’s reputation comes at a time of great momentum for the early crypto industry.

Cryptocurrency investors are rampant this year, with prices for Bitcoin and other major cryptocurrencies hit record highs in April and May and then plummeted in the coming weeks.

Recently, Bitcoin and the small digital coin ether have made a strong comeback, pushing the entire crypto market to over $ 2 trillion for the first time in three months.

The main headwind of cryptocurrencies these days is the threat of regulation. China has cracked down on speculative investment in digital assets, but a recently approved US infrastructure bill includes a clause that crypto proponents could harm the industry.

According to Demus, Europe is behind the world’s peers in the cryptocurrency industry. But he is encouraged by new EU regulations aimed at putting this sector under regulatory supervision.

“The drafts I’ve seen so far don’t seem to have any negative effects,” he said. “Of course, they can always ruin it at the last minute.”

IPO? Other than SPAC

Read more about CNBC Pro cryptocurrencies

Bitpanda has no plans to release it soon, but Demuth said he “really liked” how Wise was listed. Instead of hiring an investment bank to take over the offer, Wise went public directly on the London market without raising funds.

Bitpanda’s CEO claimed that nothing had been decided yet, but firmly denied the merger with a special-purpose acquisition company (SPAC). SPAC is a blank check company listed for the purpose of exposing other companies.

“A bad example of an IPO is a SPAC enthusiast,” Demuth said.

Last month, US digital currency company Circle said it plans to open for a $ 4.5 billion SPAC transaction.

Peter Thiel-backed crypto broker Bitpanda triples rating

Source link Peter Thiel-backed crypto broker Bitpanda triples rating

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