Coinbase-backed cryptocurrency trading firm reaches $ 1 billion valuation – .

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Be patient with bitcoin, approach S&P with caution – –


Amber Group, a cryptocurrency financial services firm, has raised $ 100 million as investors rush to support businesses in the sector.
The new funding round values ​​the Hong Kong-based start-up at $ 1 billion.

Investment bank China Renaissance led the round with the participation of other leading investors, including New York-based Tiger Global Management. Existing investors, including the venture capital arm of Coinbase, have been involved.

The latest round of funding continues a wave of fundraising activity in the cryptocurrency industry.

In the second quarter of 2021, venture capital investments in cryptocurrency and blockchain startups totaled $ 14 billion, according to PitchBook data provided to CNBC. This compares to just $ 600 million over the same period last year.

Interest in cryptocurrencies, especially bitcoin, has increased this year with the arrival of institutional investors and large corporations. The Square payment processor and electric vehicle maker Tesla are among the companies that have bought bitcoin.

But after hitting a record high of $ 64,829.14 in April, bitcoin has plunged almost in half.

Business model

Amber Group has typically sold products to institutional investors and high net worth individuals, including algorithmic trading and lending products.
Rather than being a cryptocurrency exchange that allows users to trade individual digital coins, Amber Group CEO Michael Wu said the company brings a “private banking experience to every customer of all. days “.

Wu claims that the company offers a number of different cryptocurrency products for investors to invest in.

Amber Group said it was on track to achieve $ 500 million in revenue by the end of this year and has been profitable “since inception.”

According to Wu, between 70% and 80% of the company’s income comes from what’s called the net interest margin, a measure of loan profitability. Amber Group takes care of clients’ deposits and offers them an interest rate. They then lend money from a pool of deposits to other entities at higher interest rates and earn money from that spread.

About 15% of income comes from trading fees.

While the majority of the company’s clients are institutional investors, Wu said Amber Group is making efforts to gain individual investor clients.

“We are not advocating heavy speculation or high use of leverage, rather we want our clients to be longer term, focus on risk management and achieve a stable and attractive return,” Wu said. .

Strategic acquisitions

The CEO said the new capital raised would be used to “hire even more aggressively” and to make strategic acquisitions in areas such as cybersecurity.

But Wu said the company is also looking to acquire others with regulatory licenses in certain jurisdictions, which could allow Amber Group to enter a new market.

Regulations regarding investing in cryptocurrencies differ around the world and are quite fragmented.

“I think regulation is always a challenge for this industry because it’s a very global industry,” Wu said. “It’s always about staying one step ahead, or at least staying on top of the different. regulations. We always take a very conservative approach in this regard. “

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