Kraken Reportedly Looking To Raise Cash From Top Traders To Increase M&A Fund
U.S.-based cryptocurrency exchange Kraken is allegedly looking to raise funds from a select group of investors who will contribute to the fundraising through the purchase of company shares.
According to Kraken CEO, Jesse Powell, the company wants to hold a fundraising round in which the clients will buy shares from a minimum of $100,000, with the firm valued at $4 billion.
“There is presently a limited time opportunity available to a small, select number of clients to purchase Kraken shares” Powell reportedly said.
The firm has said that the opportunity will neither be available to the general public nor is it considering a public offering.
Powell told Coindesk via email that the exchange is yet to determine how much money it looks to raise, as well as the fact that any final details will likely depend on how much interest the offer elicits.
He also added that the total amount of shares on offer “is relatively limited,” and that the offer closes on Sunday, December 16.
As per an email the platform sent to potential investors, the offer presents the exchange’s “most valued clients with the opportunity to become equity holders in the company.”
The email goes on to state that the crypto exchange is “profitable and sitting on significant reserves,” and that as a result, holding the fundraising wouldn’t qualify as a necessity.
It then states the reason the funds drive is going to be important- it will help the exchange align its interests with those of its “top clients” and at the same time build “a war chest for acquisitions in the bear market.”
Thus, for the select group of investors and the exchange, the offer presents what the company calls “a win-win opportunity.”
As to what sort of acquisitions Kraken might be looking at in the future, the CEO, Jesse Powell referred to previous business deals the exchange has completed, specifically the purchase of Coinsetter, CleverCoin, CAVirtex, and Cryptowatch.
These types of businesses are what Kraken would look to acquire, with an emphasis being on projects that have “strong synergies” with the company’s current products or services.
Any prospective acquisitions will have to boast great teams, Powell explained, before adding that Kraken’s venture arm had been especially active over the year. Any possible announcements may, therefore, come in the first quarter of 2019.
To facilitate the fund drive, Kraken has enlisted the services of a yet-to-be-disclosed third party entity, which will be tasked with verifying that any interested parties are indeed an accredited U.S. investor.
The undisclosed third-party firm will also be in charge of the transactions when the offer rolls out.
In seeking to raise funds, Kraken has joined another top U.S based cryptocurrency platform in Coinbase, which also moved to raise funds right amid the market meltdown.
Coinbase, which also sought to build a “war chest,” managed $300 million, with the platform having been valued at $8 billion.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.