Crypto exchange FTX raises $400M in new venture capital, now valued at $32 billion
Crypto exchange startup FTX announced on Monday it raised an additional $400 million from large investors like SoftBank, Paradigm, Tiger Global and the Ontario Teachers’ Plan Pension Board, valuing the platform at $32 billion.
Since the start of 2022, the global market capitalization of cryptocurrencies has fallen by more than 23% according to Coinmarketcap, but that volatility has yet to affect the fortunes of crypto companies seeking venture capital.
FTX's announcement comes less than a week after the company’s U.S. affiliate, FTX.US, announced their own $400 million raise, which vaulted the platform into unicorn status.
Last year, crypto startups attracted a record volume of VC funds, some $33 billion, with FTX alone raising its valuation by $7 billion since its last funding round in October and notching a 60% surge in its user base. It now averages $14 billion in daily trading volume, according to company data.
“We raised close to $2 billion in six months,” FTX Founder and CEO Sam Bankman-Fried said in a statement issued by the company.
Somewhat unknown a year ago, FTX has risen to dizzying heights as one of the major companies to watch in the increasingly competitive cryptocurrency exchange business.
Cryptocurrency exchanges differ from stock trading entities like New York Stock Exchange (NYSE), in that they also can serve as market makers on their own platform. But most earn their core revenue from charging a transaction fee per trade on their networks.
In turn, they’ve reaped major profits over the past year from the rise of retail investing and the dramatic rise in cryptocurrency's market capitalization.
Many exchanges like Binance, Coinbase Global (COIN) and FTX are now seeking to expand their business by offering products and services beyond the basic transaction fee model, which can be driven by market sentiment.
Recently, FTX launched its own $2 billion venture capital fund for “cryptocurrency and Web3 adoption.” It is headed by Amy Wu, an experienced venture capitalist and investor who previously served as a partner with Lightspeed Ventures, where her investments focused on crypto, gaming and consumer sectors.
Over the past six months, FTX has launched its own non-fungible token (NFT) marketplace, in addition to an ambitious sports marketing and advertising campaign — costing well over a billion dollars. In September 2021, the firm also moved its headquarters from Hong Kong to the more crypto-friendly Bahamas.
David Hollerith covers cryptocurrency for Yahoo Finance. Follow him @dshollers.
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