Blockchain.com Raises US$300 Million as Investors Find Other Ways Into Bitcoin
The investment round gave the company a US$5.2 billion valuation
The investment round gave the company a US$5.2 billion valuation
Blockchain.com, a London-based firm that provides a variety of cryptocurrency services to retail and institutional clients, raised $300 million in a deal that highlights venture capital’s growing willingness to jump back into the bitcoin frenzy.
The investment round gave the company a US$5.2 billion valuation and was led by DST Global, Lightspeed Venture Partners and VY Capital. It comes just one month after the company raised $120 million in a funding round that valued it at $3 billion.
Blockchain.com has 31 million verified users across 200 countries and 70 million digital “wallets,” or software used to store bitcoins. The firm offers retail trading and a range of services for professional investors like credit, structured products, trading and custody. Between debt and equity, the company has raised $1.5 billion since its inception in 2011, according to Chief Executive Peter Smith.
It is a significant amount for a crypto company. The latest capital raise is the third-largest in the industry’s short history, according to research firm CB Insights. In 2018, Bitmain Technologies raised $400 million. Earlier this year, BlockFi raised $350 million and in 2020, Bakkt raised $300 million.
Capital raising also stagnated over the past few years as bitcoin’s price fell from its 2017 highs and remained down. After raising $4.5 billion in 2018, deals have declined to $2.7 billion in 2020. Their re-emergence this year, with three of the six largest to date coming in 2021, is spurring hopes that private investors are returning.
They may be followed by public investors. Later this year, Coinbase Global Inc. will launch its highly anticipated initial public offering. The company plans to sell up to 115 million shares on Nasdaq, raising up to $943 million, according to its most recent filing with the Securities and Exchange Commission.
If that IPO is successful, other crypto companies are expected to follow. Whether Blockchain.com will be one of them hasn’t been determined. “The company is carefully considering its public-market options,” Mr. Smith said.
Blockchain’s business has more than doubled since the start of the year, Mr. Smith said, amid a boom for bitcoin and other cryptocurrencies. If the current rate stays constant, he predicted the company’s 2021 profit would hit a record in the “mid-nine digits.”
That is mainly because the price of bitcoin has skyrocketed over the past year. In March 2020, bitcoin fell to around $5,700. On Tuesday, it was trading around $55,000. The gains have been driven by an influx of money from the likes of billionaire investors including Paul Tudor Jones, companies including Massachusetts Mutual Life Insurance Co. and a new wave of retail, or nonprofessional, investors.
The company plans to use the new capital to hire new employees and to support its institutional business. “The institutional side requires more capital,” Mr. Smith said. “When you’re pitching asset managers they want to see a big balance sheet.”
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: March 24, 2020
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Amazon, Google, Microsoft and Meta pour billions into artificial intelligence, undeterred by DeepSeek’s rise
Tech giants projected tens of billions of dollars in increased investment this year and sent a stark message about their plans for AI: We’re just getting started.
The four biggest spenders on the data centers that power artificial-intelligence systems all said in recent days that they would jack up investments further in 2025 after record outlays last year. Microsoft , Google and Meta Platforms have projected combined capital expenditures of at least $215 billion for their current fiscal years, an annual increase of more than 45%.
Amazon.com didn’t provide a full-year estimate but indicated on Thursday that total capex across its businesses is on course to grow to more than $100 billion, and said most of the increase will be for AI.
Their comments in recent quarterly earnings reports showed the AI arms race is still gaining momentum despite investor anxiety over the impact of China’s DeepSeek and whether these big U.S. companies will sufficiently profit from their unprecedented spending spree.
Investors have been especially shaken that DeepSeek replicated much of the capability of leading American AI systems despite spending less money and using fewer and less-powerful chips, according to its Chinese developer. Leaders of the U.S. companies were unbowed , touting advances in their own technology and arguing that lower costs will make AI more affordable and grow the demand for their cloud computing services, which AI needs to operate.
“We think virtually every application that we know of today is going to be reinvented with AI inside of it,” Amazon Chief Executive Andy Jassy said on Thursday’s earnings call.
Here is a breakdown of each company’s plans:
Amazon said a measure of its capex that includes leased equipment rose to a record of about $26 billion in the final quarter of 2024 , driven by spending in its cloud-computing division on equipment for data centers that host AI applications. Executives projected it would maintain the fourth-quarter spending volume in 2025, meaning an annual total of more than $100 billion by that measure.
The company—which gets most of its revenue from e-commerce and most of its profit from cloud computing—also projected overall sales for the current quarter that missed analysts’ expectations. Its shares slid about 4% in after-hours trading Thursday. The stock rose more than 40% in 2024 and was up nearly 9% this year before its earnings report.
Jassy said AI has the potential to propel historic change and that Amazon wants to be a leader of that progress.
“AI represents for sure the biggest opportunity since cloud and probably the biggest technology shift and opportunity in business since the internet,” Jassy said.
Google shares are down about 7% since its earnings report Tuesday, which showed disappointing growth in its cloud-computing business. Still, parent-company Alphabet said it is accelerating investments in AI data centers as part of a surge in capital expenditures this year to about $75 billion, from $52.5 billion in 2024. The spending will go to infrastructure both for Google’s own use and for cloud-computing clients.
“I think part of the reason we are so excited about the AI opportunity is we know we can drive extraordinary use cases because the cost of actually using it is going to keep coming down,” said CEO Sundar Pichai .
AI is “as big as it comes, and that’s why you’re seeing us invest to meet that moment,” he said.
Microsoft has said it plans to spend $80 billion on AI data centers in the fiscal year ending in June, and that spending would grow further next year , albeit at a slower pace.
Chief Executive Satya Nadella said AI will become much more extensively used , which he said is good news. “As AI becomes more efficient and accessible, we will see exponentially more demand,” Nadella said.
Growth for Microsoft’s cloud-computing business in the latest quarter also disappointed investors, leaving its stock down about 6% since its earnings report last week.
Meta, too, outlined a sizable increase in its investments driven by AI, including $60 billion to $65 billion in planned capital expenditures this year, roughly 70% higher than analysts had projected. Shares in Meta are up about 5% since its earnings report last week.
CEO Mark Zuckerberg said investing vast sums will enable it to adjust the technology as AI advances.
“That’s generally an advantage that we’re now going to be able to provide a higher quality of service than others who don’t necessarily have the business model to support it on a sustainable basis,” he said.
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