Today global bitcoin exchange Kraken announced a multi-million dollar agreement with SBI Investment, one of Japan’s leading and most respected venture capital firms, to invest in and lead the Series B round of financing in Kraken. SBI Investment is the venture capital arm of SBI Holdings Inc (TYO:8473), the world’s first internet-based financial conglomerate. The terms of the deal were not disclosed.
SBI Holdings, the parent company of SBI Investment, generated operating revenues of ¥245 billion in 2015, or over $2 billion dollars, including an operating income of ¥68.2 billion or approximately $570 million. The SBI Group consists of 208 companies (as of September 2015) operating in approximately 20 countries and regions, in sectors including financial services, asset management and biotechnology.
The announcement of the milestone agreement between Kraken and SBI Investment comes less than two weeks after announcing the acquisition of Coinsetter and Cavirtex, two of the oldest and most prominent exchanges in North America. The acquisitions marked a significant expansion for Kraken into the prime American and Canadian markets.
“We knew that we wanted to invest in Bitcoin and the blockchain. We wanted a company that would be a wise strategic investment,” said SBI Holdings CEO Yoshitaka Kitao. “Kraken has been a leading global bitcoin exchange for years. They have grown tremendously during that time while building a strong reputation as one of the most innovative, secure, compliant, and reliable companies in this emerging financial services area. Kraken was the clear choice.”
In March 2014, Kraken announced that they had raised $5 million in Series A financing. The round was led by Hummingbird Ventures with participation from Blockchain Capital and Digital Currency Group, among others. In the 22 months since, Kraken has become a truly global bitcoin exchange. Traders have made over $1.4 billion in transactions on the platform while trading bitcoin and other digital assets for euros, US dollars, Japanese yen, British pounds, and Canadian dollars.
In 2014, Kraken was selected by the Tokyo’s court appointed trustee to assist MtGox creditors in the investigation of missing bitcoins, in filing claims, and in distributing remaining assets. As of September 2015, 202,159 bitcoin and $11,474,707 USD is expected to be disbursed to approximately 25,000 creditors.
Kraken CEO Jesse Powell said, “SBI’s investment means a lot to us. We’re proud to have such a strong strategic partner leading our round. It’s a fantastic first step toward completing Series B, which will ultimately enable us to scale our business worldwide. Kraken will be prepared to meet the fast-increasing demands of an emerging ecosystem of blockchain-enabled assets.”