Crypto start-up MoonPay hits $3.4 billion valuation as bitcoin fever reaches new heights
It is not surprising that major players in this space, from the Winklevoss twins’ virtual currency exchange Gemini to Ethereum cofounder Joseph Lubin’s blockchain start-up ConsenSys, have announced huge new funding deals within the past week.
MoonPay, a relatively new venture capital firm, is taking crypto mania to new heights. The fintech company, which has been around for three years, announced Monday that it had raised $555 million in its initial financing round. Coatue and Tiger Global led the investment. It values the company at $3.4 million.
MoonPay, a Miami-based company founded in 2018, allows users to buy and sell cryptocurrency using traditional payment methods such as bank transfers or credit cards.
It also sells its technology to other businesses including crypto website Bitcoin.com and non-fungible token (NFT) marketplace OpenSea, a model CEO Ivan Soto-Wright calls ‘crypto-as-a-service.’
Soto-Wright stated that the company aims to make crypto more accessible than video-conferencing tools such as Zoom, which made it easier to make calls over internet.
He stated that he believes right now, with the blockchain and cryptocurrency, we are still in dial-up times,’ he said to CNBC in an interview.
“Eventually, we will reach a place where it is frictionless to move any value anywhere in the world and costs move as near as possible to zero.”
“PayPal for Crypto”
Venture capital investment in start-ups is growing rapidly, with the prices of Bitcoin and other cryptocurrency hitting new highs. After the April blockbuster listing by crypto exchange giant, the investors are now looking for the next coinbase.
MoonPay claims it is a gateway to digital assets and makes a compelling pitch to investors. This includes Bitcoin, Ethereum, and other digital tokens such as NFTs. However, Soto-Wright has a vision to expand the platform to include all digital fashion and tokenized stocks.
He said, “People call us similar to Paypal, except for crypto.”
Soto-Wright stated that the company has strong controls in place and checks to combat money laundering. Regulators are becoming more concerned about illegal activity on the market.
MoonPay claims it is profitable since its platform was launched in 2019. After transaction volumes soared 35-fold since 2020, MoonPay is poised to reach $150 million in annual revenue. More than 7 million people use its service.
The company is still up against stiff competition, not only from fintech giants like PayPal, which launched its own crypto features last January.
Soto-Wright stated that he is not concerned about competition. He described PayPal as a “walled garden” that does not give users access to their assets. He stated that customers should be able to take control of their private keys and passwords, which will allow them access to their crypto funds.
MoonPay intends to use the funds raised for new products and expansion. Soto-Wright stated that the firm has already set itself the goal of taking the business public. He stated that the firm has aspirations to eventually become a public company.
However, cryptocurrencies can be volatile and this has affected even the most prominent players in the space. After a decrease in monthly users, Coinbase missed its sales estimates for the third quarter.
Bitcoin reached an all-time record high of almost $69,000 earlier in the month but has since fallen about 17%. Ether is now down 13% from its record high.
MoonPay’s Soto-Wright stated that it is ready for any downturn in crypto markets and added that the firm is ‘agnostic about which assets it supports’.
He stated that the blockchain would disrupt financial services and other applications in the same manner as voice over IP (internet protocol) disrupted telecoms.
“There will be volatility because the market is trying out different assets and blockchains.
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