The Crypto Market Is Slumping, But Massive Crypto VC Deals Keep On Coming

This is an excerpt from Deal Flow, Forbes‘Newsletter twice a week on the latest offers of billions of dollars of venture capital, private equity, mergers and acquisitions and beyond. Want a new edition in your inbox as soon as it comes out? Subscribe here.

The cryptocurrency market looks terribly wintery these days. Bitcoin fell more than 70% from last year’s highs. In all cryptocurrencies, the recent crash ended nearly $ 2 trillion. As a billionaire FTX president Sam Bankman-Fried Recently, “people with money are afraid.”

Undoubtedly, there is more fear going through the cryptographic market than at this time last year. But there is also a vein of healthy optimism. Investors are still pumping huge sums of money into crypto companies, confident that the last few months are just the latest recession in a cycle of booms and falls of years rather than any kind of cryptographic Armageddon.

Falcon X, a brokerage firm known for offering cryptocurrency derivative transactions to institutional investors, raised $ 150 million in Series D funding this week, resulting in a $ 8 billion valuation, compared to a $ 3.5 billion valuation last year August. My colleague Rosemarie Miller has more information about the investment, which was attended by people like GIC, Thomas Bravo e Tiger Global.

For Raghu Yarlagadda, the founder and CEO of FalconX, the involvement of these big names in the middle of a cold market has clear implications. “What you signal is that excitement towards the medium and long term of cryptocurrencies,” he told Rosemarie.

The same day FalconX announced its new nine-figure funding, another cryptocurrency startup did the same. Prime Trusta provider of various cryptographic infrastructure and custody services, took $ 107 million for its Series B round. My colleague Nina Bambysheva noted in more detail Prime Trust’s plans for the new capital, which include facilitating investment by retirement funds in cryptocurrencies.

Another crypto-powered startup lifted its own mega-round earlier in the week, like Magic Eden closed a $ 130 million B-Series round with a $ 1.6 billion valuation. Magic Eden operates a Solana-based marketplace to buy and sell NFT; as my colleague Maria Gracia Santillana Linares points out in her story, it is now the third largest NFT market valued at more than $ 1 billion. Open Sea e It seems weird.

Three months ago, Magic Eden raised $ 27 million in Series A funding with a valuation of just $ 77 million, according to PitchBook. NFT’s broader market may be plummeting (as of May, weekly sales were down more than 90% from last year’s peak), but that scenario hasn’t stopped Magic Eden from achieving explosive growth.

Another cryptocurrency startup unveiled its plans this week for a different type of fundraiser. Roxewhich facilitates blockchain payments, announced plans to go public by merging with a SPAC, raising up to $ 57.5 million in revenue (though probably much less, due to investor bailouts) and resulting in a business valuation of $ 3.6 million.

This is the second time in the last six months the founder of Roxe Haohan Xu made a SPAC agreement: in January, Apinificara cryptographic trading platform also founded by Xu, agreed in January to go public with a valuation of $ 530 million.

Compared to last year, the crypto market may be down in the dumps. But everything is relative. Two years ago, when bitcoin was trading at less than $ 10,000, the prospect of reaching $ 20,000 could be considered a resounding success. The recent flood of startup funds is a sign that investors think this is still just the beginning for the crypto market, not the beginning of the end.

The low market dreams of private capital

Investing in private capital has historically been the domain of large institutions or of very, very rich individuals. In recent years, however, the industry has identified its next major area of ​​growth: individuals whose net worth is seven or eight figures instead of nine or ten.

This search for wealthy retail investors is gaining momentum, according to a story posted Thursday by my colleague John Hyatt. The argument for investing in private equity has always been that it creates better returns than a portfolio focused solely on bond stocks, although some researchers and experts are unsure whether that promise matches reality. In the midst of the current market slowdown, with stocks of all kinds declining, the potential for better performance of alternatives grows even more attractive.

“There is a feeling among investors, broadly speaking, that there are gains and opportunities in private equity and private credit that until recently were not available,” he says. Mercer Advisors investment manager Donald Calcagni.

Want more on boosting private equity in retail? Here’s a look at why some private equity products have disappointed investors, and here’s the story of a startup that tries to make it easier for everyday investors never to enter the EP.

Bain Technology Opportunities

Bain Capital has been in the shopping business for almost 40 years. He threw his Bain Capital Ventures arming for more than two decades to branch out into early-stage investments. But until recently, there was still a gap: Bain did not have a family of funds focused on the type of growth agreements that usually serve as a bridge between initial investments and acquisitions.

Then in 2020, the company was launched Bain Capital Tech Opportunities, closing its first fund at $ 1.25 billion. And this week, the unit has been busy looking for some tech opportunities.

In a deal, Bain Capital Tech Opportunities led an investment of 590 million euros ($ 621 million) in Summarize, valuing the British startup fintech at 8 billion euros. Separately, the unit injected $ 150 million Atacama, a Canadian data management company. In total, Bain Capital Tech Opportunities has now made 20 investments in the past two years, according to PitchBook.

SumUp funding is especially interesting. Eight billion is a big number, but it’s not as much as 20 billion euros, which was the valuation SumUp was looking for earlier this year. The fact that it has stayed so far is the latest sign of new valuation pressures on European startups and major fintech startups. SumUp ticks both boxes, as it does Clearwhich, according to reports, faces a potential $ 30 billion valuation decline with a new round of funding.

Personio’s fundraising drive

However, not all European startups have to reduce their valuation ambitions. Persona Munich-based HR software developer announced a $ 200 million extension to its Series E round with a valuation of $ 8.5 billion, compared to a valuation of $ 6.3 billion when it filed the initial $ 270 million tranche dollars of the round in October.

Capital of Greenoaks led that initial funding, and also led this week’s extension, with major names like Accelerate e Ventures Index also participating in the general shift. The deal continues to grow very fast for Personio: it was valued at $ 1.1 billion with a Series D round in early 2021, and in just 2020 it was worth less than $ 500 million, according to PitchBook.

What was behind that rapid growth? And how the situation of Personio compares with other European unicorns Clear? My colleague Iain Martin has the full story on funding.

Subscribe here to receive Deal Flow in your inbox every Tuesday and Friday morning. You will receive a detailed analysis of the most important offers of the day, as well as a summary of other recent headlines, recommended readings, news of the offers to see, and more.

Source link

Leave a Comment

Your email address will not be published.