Kraken Explores Pre-IPO Financing Options Ahead of Public Offering
An IPO is being considered by Kraken, a top cryptocurrency exchange, for a significant fund-raising session as digital asset markets continue to bloom. This activity links up with rising investor enthusiasm and changing laws, pointing toward stock exchange initiation for cryptocurrencies at large internationally.
Kraken, an established cryptocurrency trading platform, is contemplating a final funding round before possibly going public, following interest from prospective investors during the current surge in the digital-asset market, according to individuals with knowledge of the situation.
The exchange is expected to aim for a funding amount exceeding US$100 million, as mentioned by one of the individuals. With cryptocurrencies approaching record highs and a noticeable change in the stance of US regulators towards digital assets, businesses in the industry are experiencing increased investor interest and are re-engaging in discussions about going public. Robinhood Markets Inc. announced Thursday that it will acquire Bitstamp Ltd., a crypto exchange. Kraken has expressed interest in launching an initial public offering since at least 2021.
It’s probable that Kraken will secure the funds through an initial public offering (IPO) round, as two individuals mentioned, speaking on the condition of anonymity due to the confidentiality of the talks. The process of raising money could be finished by the end of the year, as another individual noted. Kraken, established in San Francisco in 2011, is owned by Payward.
“We are always exploring strategic paths toward Kraken’s Mission: accelerating the global adoption of crypto,” Kraken said in a statement while declining to comment specifically on pre-IPO fundraising or an IPO. “We remain fully focused on investing in this goal.”
Kraken is in search of a “leading” company to become a member of its board and assist it in achieving a successful initial public offering (IPO) within the next year, according to the individuals. The discussions have been limited to informal conversations about terms and values, with no official contracts or agreements in place, one of the individuals mentioned.
Although Kraken has expressed interest in going public for a number of years, it has faced obstacles due to the previous crypto market downturn and conflicts with the US Securities and Exchange Commission (SEC). Kraken reached a settlement with the SEC in the previous year but is currently involved in legal proceedings over another case, where the SEC accused Kraken of running an unregistered broker-dealer, clearing agency, and exchange — allegations similar to those made against Coinbase Global Inc., the biggest crypto exchange in the US. Kraken is contesting these claims.
Lately, US authorities and lawmakers have noticed a noticeable shift in the perception of cryptocurrencies. In January, the Securities and Exchange Commission (SEC) gave the green light for exchange-traded funds to directly invest in Bitcoin, and in May took a significant step towards approving similar funds to invest in Ether. Cryptocurrencies have also emerged as a key political topic, with candidates for the presidency vying to be perceived as supportive of the industry.
As cryptocurrency values have surged, Kraken is anticipated to generate revenue ranging from US$1 billion to US$2 billion this year, according to sources. Coinbase, which went public via a direct listing in 2021, is projected to bring in US$5.9 billion in revenue, according to estimates from analysts, as compiled by Bloomberg.
In conclusion, Kraken’s IPO aspirations reflect the dynamic growth of the crypto sector, promising a future where digital assets are increasingly mainstream and financially significant.
