FTX said it raised $ 900 million from more than 60 investors, including venture capital firms Paradigm and Sequoia Capital and private equity group Thoma Bravo, valuing the company at $ 18 billion. A previous round of funding valued FTX at $ 1.2 billion last year.
Known primarily for its cryptocurrency derivatives exchange, FTX has quickly become one of the main challengers for Binance, Coinbase, and other more established markets. A spokesperson for FTX said the company’s annualized revenue is nearly $ 1 billion.
FTX, which is domiciled in Antigua and has its main office in Hong Kong, has started expanding its presence in the United States, although it prohibits Americans from trading on its main derivatives exchange due to regulation. Its US market, FTX US, offers more limited trading services.
Other investors in the financing round included SoftBank of Japan; Daniel Loeb’s third point; the family of hedge fund manager Paul Tudor Jones; and Izzy Englander, director of Millennium Management. FTX said Paradigm, fintech venture capital firm Ribbit Capital and brokerage firm BTIG have assisted its venture capital team in the fundraising effort. Ribbit is also an investor.
“We started as a new derivatives exchange two years ago, and this cycle will help us continue to develop a larger and broader vision of what FTX could become,” said Sam Bankman-Fried, its General manager.
The funding comes after a boom in cryptocurrency trading over the past year, which has brought investors into the industry. Venture capitalists have invested $ 7.3 billion in nearly 670 cryptocurrency startup deals since the start of 2021, according to PitchBook data, already exceeding the dollar total for the entire last year.
FTX’s revenue has grown tenfold this year and its exchange averages over $ 10 billion in daily trading volume from more than one million users, the company said. Earlier this year, FTX paid $ 135 million to purchase the naming rights to the Miami Heat’s basketball arena.
In recent months, bitcoin and other cryptocurrencies have fallen as global regulators step up their oversight, especially on stablecoins and major exchanges. Shares of Coinbase, which went public at a market cap of around $ 76 billion in April, have since sank more than 20%.
Bankman-Fried told the Financial Times this month that it sees established financial institutions, such as Goldman Sachs and stockbroker CME Group, as potential acquisition targets as FTX grows.
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Forbes recently estimated Bankman-Fried’s net worth at $ 8.7 billion. He also runs Alameda Research, a cryptocurrency trading company with over $ 1 billion in digital assets.
Binance, which was an early investor in FTX, had sold its stake in the company, a Binance spokesperson confirmed. The exchange has recently encountered problems with regulators in Europe and Asia.
“The world needs a high-quality global crypto exchange that will cooperate with regulators,” said Alfred Lin, a partner at Sequoia, who oversaw the company’s investments in Airbnb and DoorDash. “FTX is that exchange and has the potential to become the leading financial exchange for all types of assets. “