A few months after raising a €10MM private sale and €32MM public sale the Austrian crypto exchange Bitpanda receives $ 52 million in series A funding – including PayPal founder and investor Peter Thiel.
The founders Eric Demuth, Paul Klanschek and Christian Trummer of the Austrian crypto exchange were bursting with pride after they recently announced the Series A funding of their crypto community. The Viennese start-up was able to secure 52 million dollars from investors – the largest financing round to date for an Austrian start-up this year, led by Valar Ventures, the New York VC of the billion-dollar Peter Thiel. In addition to Thiel, the Austrian VC Speedinvest and other VCs provided some capital.
Series A round follows token sale
It was only in August last year that the Austrian Bitcoin broker collected 43.6 million € for its exchange token BEST via an initial exchange offering. In April of this year, the leading Austrian VC Speedinvest invested in the Vienna crypto company with an amount of less than ten million euros. The common goal of the two companies? To expand Bitpanda and its trading platform, on which you can buy cryptocurrencies as well as precious metals, worldwide. As a result, growth markets such as France, Turkey and Spain were targeted, where the platform launched in April.
Apparently due to the sharp increase in the number of new customers and the pan-European expansion, investors have now supplied the Vienna crypto exchange with fresh capital.
Expansion, expansion, expansion, …
Bitpanda wants to use the money to expand into other European countries and take on 70 new employees at the Vienna location by the end of the year. Around 130 people currently work for the fintech, which operates a trading platform for Bitcoin, among other things. Valar Ventures co-founder Andrew McCormack wants to turn the Austrian crypto exchange into Europe’s next “fintech unicorn”, ie a start-up with a valuation of more than one billion dollars.
Austrian Crypto exchange, Bitpanda, is jumping on the DeFi trend
The Austrian crypto exchange recently focused on the “Decentralized Finance” (DeFi) trend and listed 6 DeFi tokens on its exchange. This includes Uniswap (UNI), yearn.finance (YFI) and Synthetix Network Token (SNX). As a result, the start-up entered the booming DeFi area just in time and is celebrating this with a €55k promotion campaign for its traders.
Ex-Paypal, Thiel with focus on FinTech
The native of Frankfurt is sometimes viewed critically by the tech scene, as he has repeatedly been suspected of being an adviser to US President Donald Trump in the background. However, his knack for successful investments remains undisputed. Just a few years ago, the portfolio of start-ups was a colorful mix of companies from a wide variety of areas. In the meantime, his investments are almost exclusively focused on FinTech and InsurTech. In addition to transfers, investments were also made in Trade Republic, N26, Stash and Qonto. For the investor, this is a kind of “coming home”. After all, he began his career in 1999 by founding one of the most important fintechs of the dotcom era, the online payment service provider PayPal. In addition, he played a role in the game on Facebook right after the social media platform was founded.
At Bitpanda, we use industry-leading technologies to create innovative products that democratize the financial world. Our mission is to give everyone fair access to the financial market – regardless of their individual financial and cultural background.
Eric Demuth, CEO @Bitpanda on his vision for the Austrian Crypto exchange
Series A round – deal structure
It is not yet clear how many shares of Bitpanda the investment vehicle of the tech billionaire has acquired. Currently there are no more details about the valuation for the company. However, the unicorn status – a billion-dollar valuation – that the Austrian crypto exchange was aiming for, was probably not achieved. As part of the investment round, Andrew McCormack of Valar Ventures will join the board of the crypto broker. With the injection of funds, the workforce is expected to grow to 300; around 70 positions are currently advertised.
Valar Ventures’ investment is a strong vote of confidence in the Austrian crypto exchange and our corporate vision – after all, it comes directly from one of the world’s most important investors in emerging technology companies,
Outlook – Have CEXes (centralized exchanges) a long-term survival chance vs. DEXes?
While centralised exchanges like Kraken, Bitfinex, Binance. or smaller ones like Bitpanda are still popular among crypto users – especially in terms of fiat trading, we have seen a rapid rise of decentralised exchanges (DEXes) in 2020 with Uniswap leading the race.
The long-term outlook mostly depends on the usability, regulatory and performance aspects of each type of exchanges. Retail investors/traders seem to finally get more comfortable with DEXes like Uniswap due to its very easy UI and due to the fact that it doesn`t require KYC. For algorithmic or HFT (High frequency-) traders where order execution times play a big role a DEX in its current form is not a viable solution.