Crypto trading platform Bitpanda has raised $263m, a monster funding round which comes just 4 months after its last 9-figure fundraise and is a sign of the huge excitement around cryptocurrency startups.
The funding round, led by Peter Thiel’s Valar Ventures, values the company at $4.1bn, which is more than three times the March valuation of $1.2bn. The company is Austria’s first “unicorn” and most valuable tech startup.
The new valuation also turns the company's founders into near billionaires. Unusually for a company of this size, the three founders Eric Demuth, Paul Klanschek and Christian Trummer still own around 50% of the business.
It makes Demuth and Klanschek worth around $800m each on paper and Trummer, who has fewer shares, worth around $400m.
Speaking to Sifted, CEO Demuth said that the money would be used for “aggressive expansion”, saying that they planned to double down on Europe, moving into markets such as Italy, France and Spain.
Demuth said that the company had a strong unique selling point (USP) compared to US rivals such as Coinbase in its ability to navigate the European regulatory environment, which is different for every country.
“Europe is 20 markets each with different languages, different regulators, and different cultures,” he said. He added that this was a “headache USP” for the company, but a USP nonetheless.
He said Bitpanda will also use the money to push ahead with its white label product (called Bitpanda White Label), which allows banks and fintechs to use its technology to offer cryptocurrency and other trading services.
“We don’t want to build a super app,” he said, referring to apps that offer everything from stock trading to current accounts to insurance. “We want to be the platform that all companies use for their investment products.”
Demuth said that the company was also in the beta stage of its product offering around ordinary stock trading, which he said was “super easy” to build in comparison to the back end infrastructure around cryptocurrency.
The Series C valuation is striking in the context of other fintech Series C funding rounds. Digital bank Revolut, for example, was valued at $1.7bn at its Series C in 2018. Klarna’s valuation was around $1bn at Series C back in 2015, according to Crunchbase.
But it comes amid a broader jump in valuation for all private tech companies this year and in particular ones in the crypto space. This comes as the price of Bitcoin and other cryptocurrencies rose to record highs earlier in the year thanks to signs of institutional adoption before falling sharply. Prices are now on the rise again, however.
Demuth said that Bitpanda negotiated their $170m Series B back in December/January last year. A lot had changed over the past six months of crypto mania and growing mainstream interest so it felt reasonable to negotiate another raise again this summer.
Coinbase has also shown what is possible for companies able to dominate crypto trading (where transaction fees are generally a hefty 1.5% on every trade).
The raw numbers for Coinbase are remarkable. The company posted net revenue of $2.03bn in the second quarter, up 27% from the previous quarter and 1,042% year on year. Net income rose to $1.6bn from $32m in the same period last year. Coinbase has a $54bn market cap.
Bitpanda is also growing fast. The company, which has been profitable for 5 years, says it has 3m users and is on track to achieve 6x customer growth year over year. At the same time the company said that revenues will increase sevenfold in 2021 compared with the previous year.
The company on Tuesday said that four executives had joined the team: Lindsay Ross, ex-Adyen and MessageBird, has joined as Chief HR Officer; Irina Scarlat, ex-Revolut and Uber, has joined as Chief Growth Officer; João Luís, ex-Farfetch, has joined as VP of Engineering; and Michael Keskerides, ex-N26, has joined as VP Product.
The Series C investment round was led by Valar Ventures, with the participation of LeadBlock Partners, Jump Capital, Alan Howard and REDO Ventures.