Venture Capital: Crypto Financial Services Amber Scores $100M, Turns Unicorn
The Series B round valued Amber at $1 billion, up 10X from Series A in 2019.
Amber Group, the Hong Kong-based cryptocurrency financial services startup, announced Sunday its Series B round of $100 million at a valuation of $1 billion. Led by private equity player China Renaissance, the round saw participation from new investors Tiger Brokers, Tiger Global Management, Arena Holdings, Tru Arrow Partners, Sky9 Capital, DCM Ventures, and Gobi Partners. (Coin Desk)
Existing investors Pantera Capital, Coinbase Ventures, and Blockchain.com also participated in the round.
Amber offers algorithmic trading, high-frequency trading, and over-the-counter trading to over 500 institutional clients. In 2020 its assets under management clocked as high as $230 million, up 275% from the previous year. That number swelled to $1 billion by April, when cryptocurrencies hit all-time highs. Users numbered about 100,000 at the time, doubling between January and February 2021.
Founded in 2018 by twenty-something-year-old professionals who previously worked at Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS), and Bloomberg, Amber has been profitable since its inception.
According to TechCrunch, which quoted co-founder and CEO Michael Wu, Amber notched up annualized revenues of $500 million during the period January to April 2021. The startup now accounts for “2-3% of total trading volumes in major spot and derivative markets.”
“We’ve had record months over the past quarter across both client flow and on-exchange market-making volumes,” Amber Group CEO Michael Wu said in a press release announcing the funding. “Our cumulative trading volumes have doubled from $250 billion since the beginning of the year to over $500 billion.”
Use of funds
The firm plans to use the funding proceeds to expand its global operations, for new hiring and strategic acquisitions in sectors such as cybersecurity or companies that hold attractive regulatory licenses in unrepresented territories.
Investors are clearly enamored of the growth prospects of the industry – according to PitchBook data quoted by CNBC, venture capital investment into cryptocurrency and blockchain start-ups totaled $14 billion in the second quarter of 2021 versus a mere $600 million in the corresponding period last year.
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