Blockchain.com seeks new funding at $4 billion valuation – 70% down from previous round
Major crypto company Blockchain.com is reportedly in fundraising talks that could see its value drop by more than 70%.
The crypto exchange is reportedly aiming to raise funds at a fraction of the $14 billion valuation it achieved earlier this year, Bloomberg reported Thursday, citing people with knowledge of the matter.
“The fundraising will follow strategic financing the company obtained in the third quarter at an unspecified valuation from investors led by UK investment firm Kingsway Capital,” the report said.
While nothing is locked in and talks about raising money are still preliminary, the digital asset company is likely to raise funds valued at $3 billion to $4 billion, down more than 70% from its last fundraising round.
In late March, Blockchain.com reached a $14 billion valuation in a Series D funding round led by Lightspeed Venture Partners. Although the company did not disclose the amount raised, it had raised $300 million in March last year at a valuation of $5.2 billion.
According to Bloomberg, the upcoming downturn reflects the waning interest in blockchain startups as the crypto market goes through a bear market that has seen the flagship cryptocurrency, as well as almost every other crypto asset, lose roughly 70% of its value from all-time highs last year.
Meanwhile, VC funding in crypto startups fell 37% YoY to $4.44 billion in Q3 2022, according to a PitchBook research report. Compared to Q1 2022 when VC investors injected a record $8.83 billion into crypto and blockchain startups, the decline is nearly 50%.
Blockchain.com met $250 million in loans to 3AC
In a letter to shareholders in early July, Blockchain.com CEO Peter Smith said that Three Arrows Capital (3AC), the over-leveraged hedge fund now subject to liquidation, “is rapidly becoming insolvent and the default effect is approx. [USD] 270 million worth of cryptocurrency and US dollar loans from Blockchain.com.”
At the time, Smith emphasized that Blockchain.com “remains liquid, solvent and our customers will not be affected.” However, the company laid off 25% of employees, or about 150 people, in July to cut costs.
Founded in 2011, Blockchain.com is one of the longest running startups in the cryptocurrency industry and developed one of the earliest blockchain explorers and one of the earliest browser wallets. The platform claims to have 37 million verified users and that a third of bitcoin network transactions are conducted through it.
