- FTX’s fresh capital would go towards further dealmaking, if the round closes
- CEO Sam Bankman-Fried has said his crypto company bailouts have led to mixed results
Crypto exchange FTX could retain its $32 billion valuation if a fresh billion-dollar fundraising round goes through, despite the bear market.
CNBC reported on Thursday that FTX is in talks to raise the capital, just as the price of bitcoin hovers at its lowest point since December 2020. Discussions reportedly aren’t final and could still fall apart.
If FTX does secure its target investment, the valuation would match previous fundraising round in January. At the time, it raised $400 million in a Series C round in its third raise within six months.
Among the exchange’s current investors are SoftBank’s Vision Fund, Race Capital, Tiger Global, tennis player Naomi Osaka and British hedge fund manager Alan Howard.
The news suggests FTX is one major crypto player relatively unscathed by the market downturn. It scored a number of discounted deals, including Canadian exchange Bitvo alongside the right to buy crypto lender BlockFi for a maximum of $240 million next year, far below the startup’s most-recent $4.8 billion valuation.
The exchange was also reportedly looking to acquire investing app Robinhood, in which CEO Sam Bankman-Fried had personally acquired a 7.6% stake in May.
FTX didn’t return Blockworks’ request for comment by press time.
FTX founder Bankman-Fried, the JPMorgan of crypto?
Race Capital partner Chris McCann, an early FTX backer, told Blockworks in a June interview that he always thought Bankman-Fried had a “decently good shot at winning the entire crypto market,” echoing consolidation of the financial services industry under banking magnate J.P. Morgan following the Panic of 1907.
“I didn’t know he’d probably win the whole crypto market and maybe even beyond that, because he’s trying to go after even general stocks and finance now, so it’s really impressive,” he said.
Still, Bankman-Fried’s bargain deals haven’t taken off yet. He told Bloomberg’s David Rubenstein in August that his efforts to bail out companies from the market downturn had mixed results. He added that he knew some would be profitable while others wouldn’t, and that the company had to make “snap judgment calls.”
More recently, FTX’s venture capital arm took a 30% stake in Anthony Scaramucci’s SkyBridge Capital.
The latest funding round would be aimed at powering further deals, CNBC said, citing sources.
FTX had offered to bail out bankrupt crypto lender Voyager Digital, but its proposal was rejected for being a “low-ball bid.” Still, CoinDesk reported the exchange is currently the top bidder for Voyager’s assets.
Financial documents leaked by CNBC in August showed FTX’s revenue soared 1,000% to over $1 billion through the bull run last year. Its operations bought in revenue of about $270 million in the first quarter this year.