Crypto unicorns: A burgeoning herd of billion-dollar crypto firms

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As Bitcoin gains popularity, crypto-centric enterprises are receiving money from venture capital firms in order to become crypto unicorns.

The second half of 2021 has just begun, yet there is already an increase in the number of unicorns appearing in the crypto industry as years of resistance from mainstream investors to crypto begin to disappear.

Since the year began, more than 50 cryptocurrency and blockchain-related projects have risen to the much-coveted unicorn status, with market analysts predicting more to come.

A unicorn is a company that has been valued at more than one billion dollars by venture capitalists. A few examples of unicorns in the mainstream include the likes of Airbnb, Uber and Elon Musk’s Space X that have all managed to garner a valuation in the tens of billions.

In the crypto sphere, Coinbase, the giant United States-based crypto exchange, is a keen example of how fast companies in the crypto industry can rise to prominent status.

With the likes of Amber Group, Blockchain.com and OpenSea coming to the fore to join the exclusive club of companies valued at over $1 billion, analysts predict that the list will continue to grow as mainstream adoption of crypto and blockchain increases.

BlockFi

BlockFi is first on the list. In March of this year, this New Jersey-based financial services company for cryptocurrency users closed its Series D investment round at a stunning $350 million, valuing the company at $3 billion.

BlockFi, founded in 2017 by Zac Prince and Flori Marquez, has received an amazing amount of fundraising, considering the firm only managed to secure $50 million in its Series C funding round last year.

BlockFi provides a number of solutions to retail crypto investors, including a crypto exchange, an interest-bearing account, and crypto loans with low interest rates. The firm claims to be one of the only crypto exchanges with no commissions or transaction fees.

With these benefits, BlockFi’s user base has grown from around 10,000 at the end of 2019 to over 250,000 individual clients and 200 institutional investors and counting. Taking into account its most recent investment round, BlockFi has raised around $450 million in equity since its founding.

Bitpanda

Bitpanda is up next. Formerly known as Coinmal, this Austria-based firm and crypto brokerage service was valued at $1.2 billion following a $170 million Series B fundraising round.

Valar Ventures, a New York-based venture capital firm launched in 2010, led the investment round, which also included help from partners such as DST Global. Valar Ventures has been dabbling in crypto businesses and is also a backer of the trading software Robinhood.

Riding on the growing popularity and acceptance of crypto, not to mention the crypto bull market that often increases the revenue of crypto market-infrastructure providers, Bitpanda’s latest round is a step forward from its Series A round nine months ago, when the startup raised $52 million.

According to Bitpanda CEO Eric Demuth, the company has been profitable for the past four years of its existence, thus highlighting to investors a notable ambition for the company’s aim at becoming Europe’s leading cryptocurrency payment and exchange platform.

“We are profitable, and we have been for four years, but in September we changed strategy and wanted to become ‘the’ investment platform for all Europe,” Demuth said.

The Bitpanda CEO also noted that the company is looking for more partners to access more capital and top talent. In terms of quality of services, Bitpanda is considered to be a reputable and fast service, not to mention a cheap alternative for crypto traders and investors.

Fireblocks

Fireblocks, a provider of crypto and blockchain infrastructure, raised $133 million in its Series C fundraising round in the first quarter of 2021.

The startup, which assists businesses by reducing the complexity of working with digital assets, has raised an additional $310 million following its Series D investment on July 27th.

In just five months, Fireblocks’ most recent funding has boosted the company’s valuation to $2.2 billion. With its most recent funding, the New York-based business has raised a total of $489 million since its founding.

Fireblocks has seen its user base grow since the start of the year from about 150 to 500 clients. In addition, the company’s annual recurring revenue has also increased by more than 300% in the last two quarters of 2021.

The firm’s CEO and co-founder Michael Shaulov said that they “expect to end the year up 500%.”

Considering the company’s annual recurring revenue in 2020 saw an increase of 450% compared to 2019, 2021 has seen a valuation boost for the company.

“We’ve already adjusted our revenue prediction for 2021 three times,” adds Shaulov in regards to the boosted valuation

Bakkt

After going public via a merger with VPC Impact Acquisition Holdings in January 2021, Bakkt’s valuation was set at $2.1 billion.

The Bitcoin futures exchange backed by Boston Consulting Group and Microsoft received $207 million in cash and an additional $325 million from other investors, not to mention $50 million from Intercontinental Exchange.

The money raised by Bakkt is expected to finance the company’s move toward a focus on consumer applications for digital assets. According to reports, more than 400,000 customers had pre-registered for the Bakkt app as the platform supports more than 30 loyalty programs.

The company offers crypto trading and payments features with a fully regulated Bitcoin derivatives futures and options market.

CoinDCX

CoinDCX, an Indian cryptocurrency exchange, recently announced a $90 million Series C fundraising round.

Following an investment round headed by B Capital Ground and with participation from Block.one, Polychain, Jump Capital, and Coinbase Ventures, the Mumbai-based startup will go down in history as India’s first crypto enterprise to achieve unicorn status.

So far, CoinDCX has attracted over 3.5 million users, with plans to use the cash raised in its most recent funding to accelerate the user onboarding process for up to 50 million users in India.

CoinDCX CEO Sumit Gupta stated in an announcement that the company “will be joining hands or entering into partnerships with key fintech players to expand the crypto investor base, set up a Research and Development (R&D) facility, strengthening policy conversations through public discourse, working with the government to introduce favourable regulations, education, and ramping up hiring initiatives.”

This move by CoinDCX comes at a time when the Indian government’s attitude on cryptocurrencies is fraught with regulatory ambiguity. While numerous market participants have presented regulatory framework ideas, the Indian government has long denounced the usage of cryptocurrency.

Blockchain.com, formerly known as Blockchain.info, is a widely popular crypto wallet and exchange that has developed dramatically since its debut in 2011.

Blockchain.com, which has over $800 billion in crypto transactions to date, raised $120 million in a capital round, bringing the platform’s value to over $1 billion.

Blockchain.com began as a blockchain explorer, providing access to Bitcoin’s (BTC) blockchains and all transactional data, including fees, the amount of confirmations for each transaction, and wallet addresses.

The site now has over 30 million active users and has seen its user base treble in the last year. In addition to Bitcoin, Blockchain.com has created support for the exploration and trade of additional blockchain-based cryptocurrencies.

Soon after collecting $120 million, Blockchain.com raised another $300 million in March, bringing its total valuation to $5.2 billion. This was part of the company’s Series C round, which included venture capital firms like DST Global, VY Capital, and Lightspeed Venture Partners.

Institutional capital ready to dip toes in crypto

The crypto market will continue to grow with each Bitcoin collapse and boom cycle, as market experts anticipate that the unicorn herd will extend even further in 2021.

After years of toiling through the many phases of crypto volatility, early birds and first movers in the crypto field are beginning to reap their gains.

As more firms continue to reach unicorn status, evidence of the crypto market moving slowly but surely into maturity has become evident. There is a clear increase in the flow of institutional capital into the crypto space and with that, it is only a matter of time before crypto goes mainstream.

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