FTX's American affiliate, FTX.US, has joined the crypto unicorn club after closing its first-ever fundraising round.
The crypto exchange, which entered the US market in May 2020, announced Wednesday that it raised $400 million in outside capital at a valuation of $8 billion, making it one of the most valued companies in the frothy market for private crypto companies. FTX, which shares billionaire Sam Bankman-Fried as a key stakeholder, closed its own $420 million fundraise at a $25 billion valuation late last year. It is in the process of closing another round that could value the firm above $30 billion.
A wide range of investors from crypto and traditional venture participated in the round including Paradigm, Multicoin Capital, SoftBank, Lightspeed Venture Partners, and Temasek.
Led by former Citadel Securities executive President Brett Harrison, FTX.US is among the several companies riding the retail trading wave to crypto riches. Since its inception, the firm has grown its user base to more than 1 million and saw volumes top $67 billion in 2021.
Still, FTX.US operates in a competitive field. Coinbase, the leading US crypto exchange, clocks in around $100 billion in volume on a monthly basis.
Harrison hopes to eat into the volumes of rivals like Coinbase and grow FTX.US's market share to a double-digit percentage by the end of 2022.
His bet is that the addition of stocks and crypto derivatives will buoy that growth. The firm acquired LedgerX to form FTX.US Derivatives and has publicly expressed its interest in offering stock trading—a business currently dominated by retail-focused Robinhood.
"They have a huge user-base," said Harrison, referring to Robinhood. He explained that the popular trading app company's success shows that customers want a one-stop show for their trading needs.
"No one wants to wire between accounts, dealing with different banks," he said. "We don't need it to be widely profitable in stocks for it to be worthwhile."
The number of crypto unicorns has been growing at a fast clip, fueled in no small part by the venture capital eyeing opportunities in the industry. FTX itself launched a $2 billion venture fund at the start of 2022, following in the footsteps of a16z and Paradigm which both launched multi-billion venture investment vehicles in 2021.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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