Crypto startup MoonPay hits a valuation of $ three.four billion as Bitcoin fever hits new heights

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MoonPay CEO and Co-Founder Ivan Soto-Wright speaks at the Bitcoin 2021 conference in Miami, Florida.

Eva Marie Uzcategui | Bloomberg | Getty Images

Cryptocurrency startups raised record funding this year.

So it’s no surprise that some key players in this space – from the Winklevoss twins’ Gemini virtual wallet to Ethereum co-founder Joseph Lubin’s blockchain startup ConsenSys – announced massive new funding deals last week.

A relative newcomer, MoonPay is taking crypto mania in venture capital to new heights. The three-year-old fintech company announced on Monday that it had raised $ 555 million in its first round of funding. The investment, led by Tiger Global and Coatue, values ​​the company at $ 3.4 billion.

The Miami-based software, founded in 2018 by MoonPay, enables users to buy and sell cryptocurrencies using traditional payment methods such as credit cards, bank transfers, or mobile wallets such as Apple Pay and Google Pay.

It also sells its technology to other companies, including the crypto website Bitcoin.com and the non-fungible token (NFT) market OpenSea, a model that CEO Ivan Soto-Wright calls “crypto-as-a-service.”

Soto-Wright said the company aims to bring crypto to the masses, just as video conferencing tools like Zoom have made it easier to make calls over the internet.

“With the blockchain and the cryptocurrencies we are currently still in the days of dialing in,” he told CNBC in an interview.

“At some point we will get to a place where it is easily possible to transport any value anywhere in the world and the costs will be as close to zero as possible.”

“PayPal for crypto”

With prices for Bitcoin and other cryptocurrencies hitting all-time highs recently, venture capital investments in the startups that drive the market are booming. Investors are looking for the next Coinbase after the blockbuster listing of the crypto exchange giant in April.

MoonPay’s pitch to investors is that it provides a “gateway” to digital assets. For the time being, this includes Bitcoin, Ether and other digital tokens such as NFTs. However, Soto-Wright’s vision is to expand the platform to include everything from digital fashion to tokenized stocks.

“People call us similar to PayPal, but because of crypto,” he said.

The company has strict controls and controls in place to combat money laundering, Soto-Wright said. Regulators are increasingly suspicious of illegal activities in the market.

MoonPay says it has been profitable since launching its platform in 2019. The company is well on its way to achieving $ 150 million in annual revenue this year after transaction volumes skyrocketed 35x as of 2020. Its service is now used by more than 7 million customers.

Still, the company faces stiff competition, not least from fintech pioneers like PayPal, which introduced its own crypto functions last year.

Soto-Wright said he wasn’t worried about the competition. He described PayPal as a “walled garden” that gives users no control over their assets. “We believe that the future of cryptocurrency is for customers to take possession of their private keys,” he said.

IPO ambitions

Looking to the future, MoonPay plans to spend the money raised on new products and enhancements. Soto-Wright said the company already has ambitions to take the economy public. “We have the ambition to be a public company at some point,” he said.

However, cryptocurrencies are notoriously volatile and that has affected even the most famous players in the field. Coinbase, for example, missed sales estimates in the third quarter after a drop in monthly users.

Bitcoin hit an all-time high of nearly $ 69,000 earlier this month, but has fallen about 17% since then. Ether, meanwhile, is down 13% from its all-time high.

Soto-Wright said MoonPay was prepared for a possible downturn in the crypto markets, adding that the company was “agnostic” about what assets it backs.

“Just as telecommunications have been disrupted by Voice over IP (Internet Protocol), we think that over time, financial services and all these different applications will be disrupted by the blockchain,” he said.

“There will obviously be volatility as the market tries to figure out which assets, which blockchains, will ultimately be adopted.”

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