Bitpanda, the crypto broker backed by Peter Thiel, triples its rating


A visual representation of Bitcoin.

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London – European crypto trading platform Bitpanda has raised $ 263 million in a new round of funding that values ​​the company at $ 4.1 billion.

That’s more than three times the value of Bitpanda’s $ 1.2 billion in the last private funding round five months ago. With the latest cash injection, the total value of the company is around $ 500 million.

The investment was led by Valar Ventures, a venture capital firm co-founded by US tech billionaire Peter Thiel. Valar is the third to support Bitpanda since the first funding round announced in September.

“I don’t like fundraising,” Bitpanda CEO and co-founder Eric Demuth told CNBC. “It takes a lot of time.”

“When you have a partner that you have a close relationship with and they have deep pockets, you don’t have to do the whole roadshow,” Demus said. “I wanted to overtake, so I wanted to be with them,” added Valor. “It was a very simple process.”

From left to right, Bitpanda co-founders Christian Trummer, Paul Klanschek and Eric Demuth.

Little panda

British billionaire hedge fund managers Alan Howard and REDO Ventures also invested in Bitpanda’s latest round, alongside existing investors LeadBlockPartners and JumpCapital.

What is a Bit Panda?

Founded in 2014, Bitpanda is a Vienna-based brokerage firm that allows people to buy and sell cryptocurrencies and precious metals. The company has also started testing a service that allows users to trade stocks around the clock this year.

“At the end of this year, I think you have a really good sale of stocks,” Demus said.

Bitpanda is one of several online brokers in Europe that is attracting increasing investor interest, in part due to the enthusiasm for trading “same stock”. Retailers have racked up unloved stocks like GameStop and AMC, inspired by the popular Reddit forums. This has increased transaction volumes on digital platforms such as Robin Hood.

Bitpanda’s competitors include Revolut, Trade Republic, and eToro.

One of the ways the company wants to differentiate itself from its competitors is by licensing technology to banks and fintech companies. He did not reveal the name of the client, but said some large companies have already implemented the system and will be able to offer cryptocurrencies and stock trades within a few months.

Bitpanda earns money from the difference between the amount someone is willing to pay for an asset and the price at which the asset is sold. According to Demus, the startup has been profitable for five years.

Profitability is rare in FinTech, and many venture capitalists in this area lose money. Finally valued at $ 33 billion, Revolut lost 167.8 million pounds ($ 232.3 million) in 2020, a 57% increase from the previous year.

Dems said many fintech companies raise funds with high valuations for “hype” and “fear of surveillance.”

“I am very skeptical about this,” he said. “A lot of companies, especially in FinTech, are purely based on a combination of hype and growth, but growth is mostly paid, so there are free products and you are just buying customers. . “

Bitpanda did not provide a breakdown of how much money it earns each year, but said revenue is expected to increase sevenfold in 2021. The platform currently has over 3 million users.

The company operates exclusively in Europe and has offices in Vienna, Berlin, London, Paris, Barcelona, ​​Milan and Krakow. We plan to use this money to develop our business in major markets such as France, Spain, Italy and Portugal.

The Cryptography Mania

Bitpanda’s reputation improvement comes at a time of great momentum for the start of the crypto industry.

Cryptocurrency investors are rampant this year, with the prices of Bitcoin and other major cryptocurrencies reaching record highs in April and May, then plunging in the weeks to come.

Recently, Bitcoin and the small digital coin ether have made a comeback, pushing the entire crypto market to over $ 2 trillion for the first time in three months.

The main headwind for cryptocurrencies these days is the threat of regulation. China has cracked down on speculative investment in digital assets, but a recently approved U.S. infrastructure bill includes a clause that crypto supporters could harm the industry.

According to Demus, Europe is behind the world’s peers in the cryptocurrency industry. But he is encouraged by the new European regulations aiming to put this sector under regulatory supervision.

“The drafts I’ve seen so far don’t seem to have any negative effects,” he said. “Of course, they can always screw things up at the last minute.”

IPO? Other than PSPC

Bitpanda has no plans to release it anytime soon, but Demuth said he “really liked” the way Wise was listed. Instead of using an investment bank to take over the offer, Wise went public directly in the London market without raising funds.

The Bitpanda CEO claimed nothing had been decided yet, but strongly denied the merger with a specialist acquisition company (SPAC). PSPC is a listed blank check company for the purpose of exposing other companies.

“A bad example of an IPO is a PSPC enthusiast,” Demuth said.

Last month, U.S. digital currency company Circle announced plans to open a $ 4.5 billion SPAC transaction.

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