FTX has closed a $900 million funding round at an $18 billion valuation

Crypto derivatives exchange FTX closes a record $900 million fundraise at an $18 billion valuation, which was worth only $1.2 billion a year ago, became the largest private equity round in the industry’s history, according to Forbes.

FTX CEO Sam Bankman-Fried

The Series B investment round had over 60 participants, including Softbank, Paradigm, Sequoia Capital, Ribbit Capital, Third Point, Lightspeed Venture Partners, Coinbase Ventures, Sino Global Capital, Multicoin Capital, the Paul Tudor Jones family, VanEck, Circle, and hedge funders Izzy Englander and Alan Howard. Instead of relying on an investment banker to organize the round FTX’s team worked directly with investors Paradigm, Ribbit, and BTIG to close the deal.

Founded in May 2019 by Sam Bankman-Fried, FTX averages over $10 billion in daily trading volume; it increased revenues tenfold this year and 75 times since its Series A funding round, closed in mid-2020.

Sam owns 58% of the company’s shares, become one of the wealthiest in the crypto space with $16.2 billion in shares and his own cryptocurrencies like BTC, ETH, SOL, and FTX Token.

“The primary goal of the raise was to find strategic allies who can help FTX grow its brand,” but the capital itself will be primarily used for acquisitions”, Sam said.

Binance, one of the first investors of FTX from December 2019 has recently given up its equity stake in FTX.

“We’ve seen tremendous growth from them, we’re very happy with that but we’ve exited completely.” CEO Changpeng Zhao explains the withdrawal as a part of “a normal investment cycle” and says it was completed on good terms: “We’re still friends but we no longer have any equity relationship.”

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