Just recently, one of the top regulated crypto exchanges Kraken, completed its crowdfunding round with $13,5 million raised. That way, Kraken pushed the company valuation towards $4 billion. The round of financing was done on an investment platform called Bnk To The Future and it gathered more than 2,200 participants.
Kraken, which is a regulated spot and futures crypto exchange, recently closed it’s funding round on an investment platform Bnk To The Future with a little more than $13,5 million raised. This turned out to be the most successful funding round on Bnk To The Future with more than 2,200 participants joining. Simon Dixon, the co-founder of Bnk To The Future told that Kraken sought the capital as a way to push it’s valuation past the $4 billion mark and fund new acquisitions.
For this funding round, Bnk To The Future created a Special Purpose Vehicle (SPV) for Kraken to receive equity indirectly from the plus 2,200 investors. That is known as a illiquid investment.
“The SPV then pools all the individual funders and acts as a single capital investor. This technique allows Kraken to bypass the SEC requirement that force it register as a public company under the 1934 Securities and Exchange Act,” writes CoinDesk.
This makes the investors not shareholders of Kraken and will realize a return only in three cases:
If Kraken starts an IPO; Gets sold to an organization; or if the exchange does a Management Buy-Out.
Originally, Kraken asked for $10,2 million in the first funding round. After four days, they saw that the market has a deep interest and extended it to a goal of $15,45 million. Even though it is reported that the funding round ended with $13,5 million raised, Simon Dixon said that they are still waiting for around 250 bank wires to go through. He expects somewhat around $14 million to be raised.
Massive Investments, Massive Perks
Simon Dixon revealed that the average investment was around $100,000, which is 10 times more than all the previous 120 funding rounds on Bnk To The Future. 60 percent of investors chose to stake fiat while the rest 40 percent chose to stake crypto. Usually, as Dixon described, they see a 70:30 ratio between fiat and crypto. He believes that this is because the crypto bull market which makes the prices rise. Another major factor on why so many investors chose to fund Kraken is because of the perks that Kraken offered.
“CryptoWatch Premium membership, the ability to leverage shares for margin collateral, priority service from our client support team, invitation to Kraken’s exclusive investor chat room, subscription to Kraken’s Daily Hash newsletter and OTC Daily report, bi-annual Kraken investor update, beta access to new Kraken products and features, limited edition Kraken swag, [and] 5% investment rebate in KFEE,” reads an e-mail which was sent to all the investors.
However, one Bnk To The Future client decided to “write down the numbers” and came up with a rather interesting statement:
“Your $1k investment bought you about 48 future shares (from 201.612.210 in total). If Kraken is really worth $4bn in the end you own 0,00002380808% of this pie. And that’s about the sum that you invested. But as you are in the “preferred share class” you get your investment back even if Kraken sells only for $112 million. Only if Kraken sells for more than 4bn we will make money.”
Additionally, Bnk To The Future has some pretty strict guidelines when it comes to registering on their platform. Investors need to either prove that they have incomes over $200,000 for the past two years, a combined income with a partner of $300,000 over the past two years, or have a net worth over $1 million. Needless to say, they all needed to pass KYC requirements.
Image taken from Kraken.com