Coinbase becomes a cryptocurrency unicorn
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US-based cryptocurrency exchange Coinbase has raised $100 million in a Series D funding round, bringing the company's valuation to $1.6 billion, and making it a fintech unicorn.
The round — which was led by Institutional Investment Partners, with participation from Battery Ventures, Draper Associates, Spark Capital, and others — brings the company's total raised to date to $217 million. The latest raise means Coinbase now accounts for 10% of all venture capital invested in blockchain technology startups, according to CoinDesk data. The money will go toward expanding its customer support and engineering teams, Coinbase said.
Besides the funding, Coinbase also has a large trove of big-name supporters. On top of the high-profile VC participants in its latest round, Coinbase previously raised $75 million in a Series C round from powerful players including the New York Stock Exchange and USAA, as well as securing another $10.5 million from MUFJ, one of Japan's largest banks. Coinbase also struck a partnership with large incumbent fund manager Fidelity earlier this year. While Coinbase's funding still falls short of the amounts raised by companies that chose to go through initial coin offerings (ICOs) — including Tezos, Bancor, and the DAO — its decision to opt for conventional VC backing means it also has access to these powerful firms' networks, and might benefit from being introduced to valuable connections.
Although unicorn status may help Coinbase attract more funding in the future, it's unlikely to make a big impact on its market share. The fact remains that it's very difficult for any one exchange to pull ahead of the competition and secure a leadership position. Cryptocurrency trading is becoming ever-more popular, and its continued rise means that the market is big enough to ensure that multiple players have room to play and gain customers. As such, unlike in other fintech sectors, unicorn valuations for cryptocurrency exchanges are unlikely to give any one exchange enough of a boost to make it an undisputed leader in this space.
Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on blockchain in banking that:
- Outlines banks' experiments with blockchain technology.
- Details blockchain projects at three major banks — UBS, Credit Suisse, and Banco Santander — based on in-depth interviews.
- Discusses the likely trends that will emerge in the technology over the next several years.
- Highlights the factors that will be critical to the success of banks implementing blockchain-based solutions.
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