North America’s biggest cryptocurrency exchange Coinbase is all set to receive an investment of $500 Million from UK-based hedge fund Tiger Global Management - following which the exchange is likely to be evaluated at $8 Billion, reports from ReCode indicate. Following this evaluation, Coinbase will become one of the highest valued startups in the US and an even bigger name in the cryptocurrency industry.
Out of the $500 Million that Coinbase is seeking, $250 Million is likely to be added to the company’s accounts while the other $250 Million would be used by Coinbase to buy out existing investors. However, the exact amount as well as the distribution of funds are yet to be finalized. Tiger Global Management is well-known name when it comes to investment firms. The company has been around since 2011 and is primarily known for global investments in public as well as private sectors.
Coinbase has been one of the biggest names when it comes to the world of cryptocurrency exchanges. Their growth over the past two years has been quite massive, as the company was evaluated at $1.5 Billion last year - and stands close to $8 Billion now. In the past, Coinbase has declared that they are a profitable firm. However, Coinbase, similar to other cryptocurrency exchanges has been affected by the cryptocurrency slowdown of 2018.
Reportedly, the firm has been trying to raise funds all year. CEO of Galaxy Digital crypto investment firm, Michael Novogratz, commented on this potential funding, saying:
“Here's the poster child (Coinbase) of the crypto space worth $8 billion — that's a real company, and Tiger's not a flake of an investor. These are smart, savvy guys.”
The $8 Billion figure is quite important for Coinbase. Earlier this year, during their Earn.com acquisition, Coinbase had tried to evaluate itself at $8 Billion. However, the company was then evaluated to be somewhere between $4.5 Billion to $6 Billion - but this funding from Tiger Global could finally help Coinbase reach the desired amount.
Another interesting aspect towards why Coinbase has been trying to reach that magic figure of 8 Billion USD could also be attributed to the company trying to come out with an Initial Public Offering, as per ReCode. The company has been adding a number of credible faces to their team. Earlier this year, Coinbase hired Balaji Srinivasan as their CTO and Alesia Haas as their CFO.
Earlier this week, Coinbase announced that they have added Chris Dodds (of Charles Schwab) to their board. Dodds’s addition to the board brings in credibility because of his mainstream finance background. Dodds was added to the board following the exit of Facebook’s David Marcus. Interestingly, there were a number of speculations earlier this year, indicating that Facebook might be interested in acquiring Coinbase.
While 2018 has had more ups than downs (Coinbase’s trading volume has dropped by 83% since January), Coinbase CEO Brian Armstrong had commented earlier this year that peaks and drops don’t really affect them much as they are focusing on “building an open financial system for the world.” Speaking at a conference in September, Armstrong also commented that he expects over a Billion people to be using cryptocurrencies over the next five years.