Crypto Exchange Kraken Launches $4b Funding Round

cryptocurrency Kraken funding round

Cryptocurrency exchange Kraken is turning to a select group of private investors to build a “war chest” in a funding round that values the firm at $4 billion.

The fundraising round will take the form of a private offering, with a $100,000 minimum, in a bid to build what the firm has described as a “war chest for acquisitions.”

CEO Jesse Powell said that while there was no strict need for Kraken to raise capital, the firm was keen to present its “most valued clients with the opportunity to become equity holders in the company.”

“We’re profitable and sitting on significant reserves so fundraising is not a necessity, however, further aligning interests with our top clients while building a war chest for acquisitions in the bear market presents a win-win opportunity.”

With bear market conditions currently prevailing in crypto markets, the Kraken fundraising drive could allow the firm to buy undervalued crypto firms, further strengthening the position for shareholders, according to the statement.

While no specific acquisition targets were mentioned, Powell highlighted past acquisitions as indicative of the type of opportunities the firm would be considering.

“We’d be looking for more along those lines, anything that would have strong synergies with our existing product/service offerings, and with great teams.”

Kraken has previously acquired firms including Coinsetter, CAVirtex, CleverCoin and Cryptowatch. Powell suggested that there may be targets in mind, saying the firm’s investment arm “has been very active in the last year,” and they were expecting to make announcements in early 2019.

The move follows a similar strategy deployed recently by exchange service Coinbase, which sought to raise funds at an $8-billion valuation, raising a total of $300 million.

In the case of Coinbase, the funding was raised as a buffer, or a “rainy day” fund, in the words of corporate and business development vice-president Emilie Choi.

The funding rounds come at a time of depressed trading in cryptocurrency markets, with 2018 set to record a decline in most major cryptocurrency markets.

Despite the downward price pressure, the fundraising shows that confidence in firms like Kraken and Coinbase, and other potential acquisition targets in the sector, remains strong.