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April 9, 2021

Crypto Exchange Kraken To Go Public After Record-Breaking Q1

April 9, 2021 - The fourth-biggest cryptocurrency exchange in the world by trading volume, KRAKEN, is reportedly looking to go public in 2022. After the recent surge in the price of Bitcoin, breaking $60,000 in March, the crypto exchange registered record volumes in its first quarter and now has more than 6 million accounts.

In an interview with Bloomberg on March 4, Kraken co-Founder and CEO Jesse Powell confirmed that the route to market would most likely be via a direct listing rather than through a SPAC, "We've got SPACs lined up around the corner beating down our door looking to do something with us. That's an unlikely possibility for us given the size of the company relative to the size of the SPACs. So we will probably do a direct listing sometime next year....No guarantees."

The largest Cryptocurrency exchange in the US and the largest crypto exchange by value, Coinbase, will be the first Crypto-exchange to go public with its shares listed on Nasdaq on April 14.

In an interview with CNBC, Jesse Powell said, "For us, any volatility is good, but it's always better when it's on the way up…The first quarter just completely blew away the entirety of last year. We beat last year's numbers by the end of February. The whole market has really just exploded...We're looking at being able to go public sometime next year," said Powell, adding that the process would probably be via, "a direct listing, similar to Coinbase."

Kraken has added four times as many new clients to its platform in Q1 2021 as it did in the second half of 2020. Furthermore, trading volumes during Q1 2021 were estimated at 1.5 times higher than in all of 2020, reaching a record level of $160 billion.

According to the CNBC interview, Kraken has recently been in talks with investors for a new round of funding, which could value the firm as much as $20 billion.

"We have been in some talks to do another round… We've kind of been delaying a bit to see where the Coinbase valuation comes in at. I suspect that the price is gonna pump much higher than it has been trading at," Powell said.

However, Kraken's CEO has commented that the company is not in a hurry to raise additional capital, emphasising its strong balance sheet. "The reason to do it would just be to bring on some more strategic investors who can help us with geographic expansion and growth," he added.

In the Bloomberg interview in March, commenting on any funding round, Powell said when asked about a $10 billion valuation for Kraken, "We're certainly on track to go public. We've had a lot of inbound interest in financing and in people buying shares in the company. Personally I think $10 billion is a low valuation - I wouldn't be interested in selling shares at that price. So...we're talking to a lot of interested parties. We may end up doing a primary financing. The company is cashflow positive. We've got a very strong balance sheet. There's not really a reason to raise new capital other than to possibly accelerate the pace of acquisitions."

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