According to a fresh report from the technology news outlet Recode, it would appear that the San Francisco-based cryptocurrency exchange platform and coin wallet service Coinbase is in the midst of wrapping up talks with a major New York investment firm.
Anonymous sources reportedly familiar with the matter have talked with Recode, and the cryptocurrency platform is supposedly eyeing a $500 million capital injection from the New York-based investment firm Tiger Global.
The Recode piece mentions that out of these $500 million, it is likely that Coinbase will strengthen its coffers with around $250 million, whilst the remaining $250 million could potentially be used to buy out existing investors.
Nevertheless, the report stresses that the exact distribution of such an investment amount remains to be decided. Such an investment would peg the valuation of Coinbase at a whopping $8 billion, which is a considerable year-over-year increase.
More specifically, Coinbase closed a Series D funding round last year, led by IVP and with contributions from Draper Associates, Section 32 and others. This funding round left Coinbase with a still substantial valuation of $1.6 billion – which would be dwarfed by the cryptocurrency platform’s new reported valuation of $8 billion.
In fact, such a substantial valuation would see Coinbase become one of the most highly valued startups in all of the United States.
Industry figures have already commented on the deal, with Galaxy Digital’s CEO Mike Novogratz noting that such an investment would prove that cryptocurrencies were not merely a bubble, or ”tulip mania”.
”Here’s the poster child (Coinbase) of the crypto space worth $8 billion – that’s a real company, and Tiger’s not a flake of an investor. These are smart, savvy guys,” Novogratz noted.
Such an increase in valuation does not, however, come out of the blue. Coinbase has been ramping up its business expansion plans over the last year, announcing and launching various new cryptocurrency-related products and services.
In addition to this, Coinbase has attracted a wealth of expertise from both established tech companies – such as Microsoft, Facebook, Amazon or Google – as well as from financial institutions.
Moreover, Coinbase has repeatedly disclosed that the cryptocurrency platform is profitable, and has sought an opportunity to raise additional capital – to allow existing investors to liquidate their shares in the venture – during the better part of 2018.
Nevertheless, it remains to be seen whether this investment will go through – but it would currently appear as quite likely.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.