According to The Wall Street Journal, Coinbase is set to raise a $100 mln investment at a $1 bln valuation.
After securing a multi-million dollar funding round led by prominent venture capital firms such as Andreessen Horowitz back in 2014, Coinbase transformed into one of the most dominant Bitcoin companies in the world, operating a popular digital currency exchange in the US and a global Bitcoin wallet platform that is used by over seven mln users.
In 2014, Coinbase was valued at around $400 mln according to Pierre Rochard of the Nakamoto Institute, who previously reported that Coinbase raised a funding round of around $50 mln at a valuation that was one tenth of Bitcoin’s market cap. At the time, Bitcoin’s market cap was valued at $4 bln and that raised the valuation of Coinbase to $400 mln.
Struggles to sustain dominance
Considering its previous valuation, Coinbase has grown 2.5x over the past three years. As an early-stage company, its growth has been consistent and satisfactory for its investors.
However, in comparison to the overall growth of the cryptocurrency market and Bitcoin industry, it can also be said that Coinbase failed to maintain its dominance over the industry, as the market cap of Bitcoin grew by 10x yet the valuation of Coinbase has only grown by 2.5x in the past three years.
Strictly in terms of gains and profit, investors would have profited a 4x larger return by simply investing in Bitcoin. Although Coinbase has struggled to sustain its dominance over the industry, it still remains an influential company and a popular go-to platform for Bitcoin users and traders.
Its digital currency exchange, GDAX, remains one of the most popular trading platforms in the US and last week, Coinbase CEO Brian Armstrong was quoted as saying that Coinbase registered a staggering 40,000 new users in a single day.
.@coinbase had 40,000 new users sign up in *one day*, or approximately one San Francisco Giant's Stadium. pic.twitter.com/tqvpqVguVQ— Brian Armstrong (@brian_armstrong) May 26, 2017
Who invested in Coinbase
In a span of three years, The Wall Street Journal reported that Coinbase raised $116.5 mln from investors. Interestingly, The Wall Street Journal noted that major financial institutions and stock exchanges such as the NYSE and US-based banks have also invested in Coinbase.
If Coinbase successfully raises a $100 mln funding round at a $1 bln valuation in the upcoming months, it will increase the total venture capital investment allocated to Coinbase to around $216.5 mln. Sources revealed that Coinbase could be valued at over $1 bln and the talks on the funding around haven’t been finalized as of yet.
To date, Coinbase has raised about $116.5 mln from investors including Andreessen Horowitz, Union Square Ventures and DFJ, as well as a number of banks and the NYSE, the paper reported.
Coinbase’s vision for growth throughout 2017 remains unclear. Considering the explosive growth of Asian Bitcoin and digital currency markets such as Japan, South Korea and China, Coinbase could target a more aggressive global expansion of its trading platform and cryptocurrency exchange.