FTX US, part of Bahamas-registered cryptocurrency marketplace operator FTX Trading, raised $400m yesterday in a series A round featuring internet and telecommunications group SoftBank’s Vision Fund 2 at an $8bn valuation.
Other investors in the round, which marked the subsidiary’s first external funding, included Temasek, Multicoin Capital, Paradigm, Ontatio Teachers’ Pension Plan, Greenoaks Capital, Steadview Capital, New Enterprise Associates and Lightspeed Venture Partners.
The funding will be used to grow the user base of FTX US, launch new business lines and further develop its derivatives products as it seeks to become the largest crypto exchange in the United States, having entered the market in May 2020, a year after parent company FTX Trading was founded.
FTX Trading itself had secured $421m three months ago, in a series B-1 round backed by 69 investors including SoftBank, blockchain payment technology provider Circle and fellow cryptocurrency exchanges Coinbase and Binance at a valuation of $25bn.
Coinbase, Circle, Softbank and quantitative trading firm Hudson River Trading were among 60 investors that jointly provided $900m for the company in a July 2021 round valuing it at $18bn. Other large digital currency exchanges however have been less active in raising equity funding.
Binance has not secured equity financing since its $300m series E round in October 2018 while Kraken’s last notable round was its $100m series C in 2019. Neither Huobi nor KuCoin have ever disclosed a notable round and Coinbase executed a direct listing in April 2021, some 30 months after its last funding round.
FTX US president Brett Harrison said: “FTX US scaled rapidly throughout the course of 2021, and our series A valuation reflects both what we have concretely accomplished and what we have laid the groundwork for in 2022.
“As lawmakers and regulators continue to develop a US regulatory framework for digital assets, we expect crypto to play a much larger role in the broader financial landscape in 2022 and beyond. We are excited to continue working cooperatively with them and feel confident that FTX US will emerge as the leading US-regulated crypto spot and derivatives exchange.”
FTX Trading set up a $2bn investment fund earlier this month, bringing over venture capital firm Lightspeed Venture Partners’ Amy Wu to head up the unit, which will invest in Web3 companies involved in blockchain-based gaming, financial technology, software and healthcare.
While other exchanges have not been raising money themselves, they have pulled in plenty for investment vehicles. Binance’s Smart Chain unit launched a $200m fund with gaming and blockchain technology developer Animoca Brands last month while Crypto.com expanded its Crypto.com Capital unit to $500m last week.
