Crypto start-up MoonPay has a market capitalization of $3.4 billion as bitcoin fever reaches new heights.
- MoonPay, a fintech company, announced Monday that it had raised $555 million in its first round of financing.
- Tiger Global and Coatue lead the investment, which values the company at $3.4 billion.
- MoonPay enables users to purchase cryptocurrency with traditional payment methods such as credit cards.
This year, cryptocurrency start-ups have raised a record amount of funds.
It's no wonder, therefore, that some of the industry's biggest names — from the Winklevoss twins' virtual currency exchange Gemini to Ethereum co-founder Joseph Lubin's blockchain start-up ConsenSys — have just announced large new investment deals.
MoonPay, a relative newcomer, is bringing the crypto craze to new heights in venture finance. On Monday, the three-year-old fintech company announced that it had raised $555 million in its initial round of fundraising. Tiger Global and Coatue lead the investment, which values the company at $3.4 billion.
MoonPay's software, which was founded in 2018, allows users to buy and trade cryptocurrencies using traditional payment methods including credit cards, bank transfers, and mobile wallets via Apple Pay and Google Pay.
In what CEO Ivan Soto-Wright refers to as "crypto-as-a-service," it also offers its technology to other companies like Bitcoin.com and the non-fungible token (NFT) marketplace OpenSea.
Soto-Wright stated that the company's goal is to make crypto more accessible to the general public, similar to how video-conferencing platforms such as Zoom have made it easier to make calls over the internet.
"I believe we are still in the dial-up days with blockchain and cryptocurrencies," he told CNBC in an interview.
"Eventually, we'll get to a point where moving any quantity of value around the planet is frictionless and expenses are as near to zero as possible."
'PayPal for cryptocurrencies'
With bitcoin and other cryptocurrencies recently hitting all-time highs, venture capital investment in the market's powerhouse start-ups is on the rise. Following Coinbase's successful IPO in April, investors are hunting for the next big thing.
MoonPay sells itself to investors as a "gateway" to digital assets. This includes bitcoin, ether, and other digital tokens such as NFTs for the time being. But, according to Soto-Wright, the platform will be expanded to encompass anything from digital fashion to tokenized stocks.
"People are comparing us to PayPal, but for cryptocurrency," he remarked.
The corporation has rigorous controls and checks in place to combat money laundering, Soto-Wright said. Market regulators have been increasingly suspicious of illegal conduct.
MoonPay claims to have been profitable since its platform launched in 2019. After a 35-fold increase in transaction volumes from 2020, the firm is on target to surpass $150 million in yearly revenue this year. More than 7 million people have signed up for its service.
Despite this, the company faces significant competition, including from financial pioneers such as PayPal, which launched its own cryptocurrency features last year.
Soto-Wright claims he is unconcerned about competition. PayPal, he said, is a "closed garden" that denies users access to their funds. "We believe the future of crypto is customers taking control of their private keys," he said, referring to the passwords that allow individuals to access their funds.
Ambitions for an initial public offering
MoonPay intends to use the funds raised to develop new products and expand its business. Soto-Wright stated that the company already had plans to go public. He stated, "We have hopes to be a public corporation in the future."
Cryptocurrencies, on the other hand, are famously volatile, and this has had an influence on even the most well-known companies in the industry. Coinbase, for example, missed third-quarter sales expectations due to a decline in monthly users.
Bitcoin reached an all-time high of about $69,000 earlier this month, but has since fallen by roughly 17%. Ether, on the other hand, is down 13% from its all-time high.
MoonPay is "agnostic" about which assets it supports, according to Soto-Wright, and is prepared for a potential slump in crypto markets.
"We believe the blockchain will disrupt financial services and all of these different applications in the same way that voice over IP (internet protocol) disrupted telecommunications," he said.
"Obviously, there will be volatility as the market tries to figure out which assets, which blockchains, will be adopted in the end."