Despite economic uncertainty brought on by the coronavirus, crypto firm Bakkt has managed to secure $300 million in capital through Series B funding.
Bakkt’s parent company Intercontinental Exchange (ICE), Microsoft’s venture capital arm M12, Boston Consulting Group, PayU, and Pantera Capital were among the participants.
Perhaps best known for offering Bitcoin futures and options, Bakkt has recently been vying to attract appeal beyond crypto traders—and last October, it unveiled plans to launch a consumer payments app in 2020.
This ambition was fueled last month by the announcement that Bakkt had acquired loyalty program provider Bridge2 Solutions. Funds from this latest financing round are going to be put toward completing the acquisition.
Bakkt app to launch in the summer
Mike Blandina, the CEO of Bakkt, used the fundraising announcement to give greater detail about the company’s plans to “give users control over digital assets.”
In a blog post, the executive explained that he has a “broad view” of what constitutes a digital asset—and argued that it should include everything from loyalty points to in-game assets and cryptocurrencies. When everything is accounted for, Blandina estimated that this represents almost $1 trillion of consumer spending power, but he added: “Despite the size of this market, consumers still find digital assets to be difficult to access, confusing to keep track of, and challenging to use.”
Bakkt’s consumer-facing app is scheduled to launch in the summer, and is designed so consumers can bring together all of their digital assets and cash and one place. The company is hoping to allow users to convert assets such as airline miles into U.S. dollars in real time—theoretically meaning they could use these accrued rewards to purchase Bitcoin or a coffee instead.
The app is also set to jump on the bandwagon of making electronic payments much more straightforward. It is expected to facilitate instant transfers between friends and family—again with the freedom to use a full range of cash and digital assets.
Addressing would-be users directly, Blandina wrote: “We believe that you hold more value than you realize and we’re here to help you track, spend, and send your digital assets however you want.”
The prospect of getting airlines to allow their customers to convert miles for dollars may seem pie in the sky. But following the acquisition of Bridge2 Solutions, Bakkt claims it now manages thousands of loyalty and incentive programs—including for seven top financial institutions and two airlines.
In a sign that Bakkt is putting its money where its mouth is, Starbucks app users are now being given the opportunity to sign up for an “early access program” that will enable them to use Bakkt as a payment method when making online orders with the coffee giant. This was a milestone that Blandina had stated in his 2020 roadmap last October.
Modern Consensus has reached out to representatives of Bakkt and the Intercontinental Exchange for a comment, but none was forthcoming at the time of writing.