A report by Recode says that U.S. cryptocurrency broker and exchange operator Coinbase is discussing a potential deal with hedge fund Tiger Global which would result in an investment of up to $500 million. The deal would assume a $8 billion valuation for Coinbase, which is in line with Coinbase’s self-valuation when it made an offer that resulted in the acquisition of Earn.com in April.
Coinbase CEO Brian Armstrong has previously said that he “would love to run a public company”, suggesting that an initial public offering (IPO) could be one of Coinbase’s goals for the future.
Michael Novogratz, CEO of Galaxy Digital, says that Coinbase’s valuation shows that cryptocurrency is more than just a fad. In an appearance at the Finance Disrupted conference in Manhattan, Novogratz commented:
"Here's the poster child of the crypto space worth $8 billion — that's a real company, and Tiger's not a flake of an investor. These are smart, savvy guys."
Before the cryptocurrency market really took off in the last quarter of 2017, Coinbase was valued at $1.6 billion after a $100 million funding round in August last year that included investors such as IVP, Spark Capital and Greylock Partners. Since then, the cryptocurrency space has received much more attention and capital, making an $8 billion valuation for one of the most prominent companies in the industry quite plausible.
Recently, Coinbase said that they would like to increase the number of cryptocurrencies on offer for their customers, and introduced a new listing framework to accelerate the process. While Coinbase’s current strategy is to offer all of the cryptocurrencies they support to their global customer base, newly added coins will potentially only be available in jurisdictions where Coinbase is able to guarantee compliance.
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