Last week, Blockchain.com announced that it raised new funding at a $14 billion valuation, nearly tripling its $5.2 billion valuation from March 2021.
While exchanges like Coinbase, FTX, and Binance seem to get a consistent amount of press, investors shouldn’t be sleeping on Blockchain.com. The UK-based crypto exchange is one of the oldest (founded in 2011), predating Coinbase and launching around the same time as Kraken. But how does it stack up against some of the competition? Let’s take a look…
What Makes Blockchain.com Different?
While other exchanges are buying rights to stadiums, launching Superbowl commercials, or are too busy dodging regulators, Blockchain.com is moving in the other direction by directly trying to onboard more institutions.
This is evident by the company’s recent acquisition of Altonomy for a rumored $250 million, to further entrench itself as the go-to exchange for institutions. Just this morning even, the exchange launched an asset management service in partnership with Altis aimed at institutional and high net worth investors.
Speaking to Real Vision in March 2021, CEO Peter Smith stated:
“I think revenue across the entire crypto space is probably 98% retail or consumer derived… in our business, about 60% to 65% of our revenue is from retail, but another 30% to 35% of it from institutional.
Most companies in crypto really are one or the other, and we are very fortunate to have both very large stable revenue lines. The institutional business… is profitable enough that it can pay for the entire operating costs of the company globally, and we would still be profitable.”
How Does The Valuation Stack Up?
In December 2021, Fortune reported that the company was looking to raise $400 million at an $18-20 billion valuation. This week’s raise at $14 billion, however, represents a greater than 20% decrease in the company’s valuation in only 90 days.
This discount almost certainly has nothing to do with the company’s fundamental business but rather represents a general softening of tech valuations due to the macro environment.
Heck, just last year CEO Peter Smith stated that the company would “do somewhere between $1.5-2.5 billion in gross revenue and make more pretax profit than most major financial institutions.”
Based on those revenue numbers and using a valuation of $14 billion, Blockchain.com is trading at around 7x last year’s revenue, compared to Coinbase, which is valued at ~$36 billion on the public markets and is trading at around 5x last year’s revenue. Meanwhile, this week, Binance US, raised over $200 million at a $4.5 billion pre-money valuation.