American cryptocurrency exchange Kraken has secured a staggering $13.5 million in funding from over 2,000 individual investors on the online investment platform BnkToTheFuture.
Notably, the company’s minimum investment goal of $6.2 million was breached within the first couple days of the campaign.
Kraken is one of the few established cryptocurrency exchanges in North America that also offers margin and futures trading.
Crowdfunding Over Venture Capitalism
The overwhelming success of the crowdfunding event prompted Kraken to revise its total investment target from $10.2 million to $15.45 million. The final figure, however, sits between the two goals at $13.5 million, thanks to contributions from 2,264 investors.
Headquartered in San Francisco, Kraken boasts a user base of over four million and an impressive compound annual growth rate (CAGR) of 387 percent. In its elevator pitch, the company said that it hopes to use these fresh funds to add new financial services and products related to the blockchain and cryptocurrency space.
Founded in 2011 as a Bitcoin-only exchange, Kraken managed to raise $1.5 million in seed funding. Nearly a year later, the exchange bagged $5 million in its Series A round. This year, the company raised a further $100 million from a handful of undisclosed investors. According to data from CrunchBase, Kraken has cumulatively raised $120.1 million to date.
In comparison, Coinbase has accrued capital worth $525 million over the course of ten funding rounds since 2012. However, while other exchange platforms have raised funds solely from venture, Kraken has gone the opposite route by choosing to approach individual investors and those familiar with crypto and blockchain technologies. In February 2019, Yahoo! Finance quoted Kraken CEO Jesse Powell as explaining,
“The reasons to not do more VC is that we don’t really need the money, and longer term it makes sense for the business to be majority owned by the users. We’d eventually like to have our interests aligned with users.”
What’s Next for Kraken?
Along with equity and other investor-exclusive benefits, the exchange told participants that they would also be given a complementary Cryptowatch Premium membership in a follow-up email. Kraken notably purchased the real-time charting and market data provider in 2017.
The company made another major acquisition earlier this year with Crypto Facilities, a UK-based futures firm, for a nine-figure amount.
While the recent $13.5 million round is undoubtedly a major success for Kraken, it remains to be seen how the company will expand its portfolio and offerings. A roadmap detailing the company’s plans for 2020 and beyond was made available for potential investors on BnkToTheFuture but restricted behind a non-disclosure agreement (NDA).
Which aspect of the cryptocurrency and blockchain industry do you think Kraken will explore moving forward? Do you think it will follow in the heels of Coinbase and Gemini to chase the institutional investor crowd? Let us know your thoughts in the comments below.