Kraken is reportedly in talks to raise between $200 million and $300 million in funding at a $20 billion valuation.
Bloomberg today cited a source as saying that the capital would be provided by a single “strategic investor.” The report comes a day after Fortune revealed that Kraken had raised $500 million earlier this year. According to the paper’s sources, the round valued the company at $15 billion.
Kraken, officially Payward Inc., operates a crypto exchange with more than 9 million users. Customers can trade in cryptocurrencies and other digital assets such as xStocks, financial instruments the company introduced in June. Kraken offers several dozen xStocks that each track the share price of a different company or publicly traded fund.
The company operates more than a half-dozen financial services alongside its flagship exchange. For consumers, Kraken offers a payment app that can be used to transfer cryptocurrency near-instantaneously. Professional investors have access to trading applications that visualize the price movements of digital assets and facilitate derivatives trading.
Kraken also offers a set of tools for financial institutions. There’s a crypto custody service for hosting digital assets that is operated by its Kraken Financial unit, a state-chartered bank incorporated in Wyoming. Kraken also offers an application programming interface that enterprises can use to embed its crypto trading features in their software.
According to Fortune, the company raised about $27 million in funding between its 2011 launch and the $500 million round it closed this year. During the second quarter, Kraken reportedly generated $80 million in adjusted earnings before interest, taxes, depreciation and amortization. Its revenue reached $412 million.
Fortune’s sources stated that the company hopes to go public in 2026. It’s unclear whether the funding round Kraken is reportedly in talks to raise may change the timing of its initial public offering.
Given that the company is profitable on an adjusted EBITDA basis, the new funding likely wouldn’t go toward financing its business operations. The goal of the raise may be to provide liquidity to employees and early investors. It’s also possible Kraken plans to spend the capital on acquisitions.
In March, the company inked a deal to buy NinjaTrader Group LLC for $1.5 billion. NinjaTrader operates a popular platform for trading in crypto futures, financial instruments that enable traders to buy digital assets at a future date for a predetermined price. Kraken gained about 2 million new users through the acquisition.
The company’s fundraising push comes on the heels of three-high profile crypto IPOs. Circle Internet Group Inc., Figure Technology Solutions Inc. and Bullish US LLC together raised about $3 billion through their listings. The success of the offerings hints Kraken could seek to go public sooner rather than later.
Photo: Unsplash
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