Coinbase, the largest cryptocurrency exchange in the world, announced today that it has closed a Series E equity round worth $300 million, bumping the valuation of the cryptocurrency exchange up to $8 billion – five times higher than it was early last year.
Following this round, Coinbase is now one of the most valuable startups in the world. The funding round was led by Tiger Global Management, with participation from Y Combinator Continuity, Wellington Management, Andreessen Horowitz, Polychain and others.
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The company plans to use these funds to continue its global expansion and build further infrastructure, offer more crypto assets – and quickly, develop utility applications for cryptocurrencies and bring more institutional investors to the crypto space.
Speaking to Bloomberg Asiff Hirji, Coinbase’s chief operating officer said: “The companies interested in investing in us know that this is the next wave of tech innovation. This was an opportunistic round. We didn’t have to go out and raise capital.”
Coinbase expects to achieve revenue of around $1.3 billion for 2018
According to a document reviewed by Bloomberg, Coinbase is also projecting that it will achieve a revenue of close to $1.3 billion for 2018. This figure comes from the commissions made on trades on its platform.
Gains and losses in its own crypto holdings are also supporting the results. However, because the company has chosen several internal measures of revenue, the exact figures can vary.
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The document also reveals that Coinbase is targeting a profit of more than $400 million – an ambitious figure seeing that the cumulative value of all major cryptocurrencies has fallen by more than 70 per cent in the past year. As a result, US-based clients trading on the Coinbase platform has also tumbled around 80 per cent since it peaked in late 2017 to the beginning of this year.
As mentioned above, Coinbase is currently planning on diversifying its product offering – particularly for institutional investors. However, as the company states itself, it is and will remain, a crypto-first company. As a result, it is at the mercy of the trends of the crypto industry.
Coinbase cuts down on staff, particularly remote workers
A report from Yahoo Finance on Friday also revealed that Coinbase cut a handful of its staff last week in its customer support, compliance and fraud departments. Whilst the company did confirm the cuts, it didn’t confirm the number, but Yahoo sources said the number was higher than 15 people. The majority of the staffers cut were reportedly remote employees.
Whilst this might not seem like a big deal, especially when considering that the company has around 550 employees, the timing is interesting. This is because of a number of rumours which state Coinbase is planning to go public.
Coinbase, in a statement sent to Yahoo Finance, said: “we’ve learned that certain teams who are co-located are more efficient, effective, and happier in their roles. So moving forward, some teams—including Support, Fraud, and Compliance—will only hire employees into Coinbase offices.”
The cuts are likely to be a reflection of the current industry. As mentioned above, its been a tough year for cryptocurrencies, with the value of major coins plummeting and traders taking a notable step back from trading the digital assets.