San Francisco-based cryptocurrency exchange Kraken is planning a fundraising round that would at least double its valuation to $10 billion.
According to a Feb. 26 Bloomberg report, a person with knowledge of the matter said that Kraken is in talks with firms including Fidelity, Tribe Capital and General Atlantic to raise the funds. However, if demand is as high as some suspect it will be, Kraken’s value could exceed $20 billion.
Reports of Kraken’s funding round follow yesterday’s news that its larger competitor, Coinbase, filed a Form S-1 with the U.S. Securities and Exchange Commission, confirming reports that it will go public with a direct stock listing, probably on Nasdaq.
The S-1 showed that Coinbase reported revenue of $1.1 billion in 2020, up from $482 million in 2019. But it’s 2020 net income of $322.3 million generated a loss of more than $30 million, the filing revealed.
Kraken is a major influence in the cryptocurrency industry, now more than ever. As Modern Consensus reported in mid-September 2020, the crypto exchange won a banking charter from the state of Wyoming, becoming “the world’s first Special Purpose Depository Institution.”
In its first year, Kraken Financial will focus on digital asset custody and wire transfers. Thereafter it plans to expand into staking services, offer a debit card allowing clients to spend their crypto funds, and provide a complete suite of online and mobile banking products. At some point, it intends to launch wealth management services.
Shortly after Kraken won its charter, crypto lending firm Figure Technologies obtained a national bank charter from the Office of the United States Comptroller of the Currency that the lender said will vastly reduce the regulatory complexity and burden it faces. The charter will also allow it “to deliver financial solutions to traditionally underserved and underrepresented consumers, driving real financial inclusion,” Figure’s head of lending, C. D. Davies, said in a statement.