Kraken Bolsters IPO Ambitions With $100 Million Funding Plan

Kraken Bolsters IPO Ambitions With $100 Million Funding Plan

BlockchainFinance

By Jakub Lazurek

07 Jun 2024 (13 days ago)

3 min read

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Kraken eyes a $100M funding round as it gears up for a potential IPO, driven by renewed investor interest and favorable regulatory shifts.

US-based cryptocurrency exchange Kraken is reportedly preparing for an initial public offering (IPO), considering a final funding round of over $100 million, according to sources. The exchange has attracted interest from potential investors amid the ongoing rally in the digital asset market.

A Bloomberg report suggests Kraken aims to secure more than $100 million in funding. Increased investor interest and a perceived shift in US regulatory attitudes towards digital assets have sparked renewed discussions about crypto companies going public. Recently, Bitcoinist reported that Robinhood acquired the crypto exchange Bitstamp.

Kraken has been contemplating an IPO since 2021. This funding round, potentially a pre-IPO round, is expected to be finalized by the end of the year. Founded in 2011 in San Francisco and operating under its parent company Payward, Kraken is dedicated to accelerating global cryptocurrency adoption.

Kraken has long planned to go public but has faced market downturns and regulatory hurdles, including ongoing legal battles with the US Securities and Exchange Commission (SEC). Kraken settled one case with the SEC in 2020 but still faces allegations of operating an unregistered securities broker-dealer, clearing agency, and exchange, which it disputes.

Recently, US regulators and politicians have taken a more favorable stance toward cryptocurrencies. The US SEC's approval of exchange-traded funds (ETFs) investing in Bitcoin and steps toward approving similar funds for Ethereum indicate a growing acceptance of digital assets.

According to Bloomberg, with the rise in crypto prices this year, Kraken is projected to generate revenue between $1 billion and $2 billion. In comparison, Coinbase, the largest US crypto exchange, went public through a direct listing in 2021 and is estimated to achieve $5.9 billion in revenue.

Kraken is actively seeking a company to join its board to ensure a successful IPO, possibly as early as next year. Discussions have involved informal exchanges of terms and valuations without formal documentation. The total crypto market capitalization now stands at $2.5 trillion, with Bitcoin consolidating above the key $70,000 threshold.

Kraken’s strategic move toward an IPO comes at a time of favorable market conditions and increased acceptance of digital assets. The potential $100 million funding would bolster Kraken’s resources, enabling expansion and strengthening its market position.

Founded in 2011, Kraken has become a leading cryptocurrency exchange. Its commitment to innovation and regulatory compliance has helped it navigate the complex digital asset landscape. The planned IPO represents a significant milestone, offering an opportunity to attract new investors and increase its market share.

Kraken’s IPO path has faced challenges, including regulatory scrutiny and legal battles. However, the recent shift in regulatory attitudes and growing acceptance of cryptocurrencies present new opportunities. Rising interest in cryptocurrencies among investors and the public has created a favorable market for Kraken’s IPO. The company’s projected revenue of $1 billion to $2 billion shows its strong market position and growth potential.

Kraken’s plans for a $100 million funding injection and potential IPO come at a pivotal time. The favorable regulatory environment, growing acceptance of digital assets, and strong market conditions provide a solid foundation for Kraken’s growth. As the company moves toward its IPO, it is poised to attract new investors and expand its market presence, solidifying its position as a leading cryptocurrency exchange. The ongoing discussions and strategic planning underscore Kraken’s commitment to innovation and its vision for the future of digital assets.

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