Crypto Broker Bitcoin Suisse Raising Series A on $280 Million Valuation

Crypto Broker Bitcoin Suisse Raising Series A on $280 Million Valuation

Published: May 14th, 2020

Swiss crypto startup Bitcoin Suisse is raising Series A funding at USD 283 million pre-money valuation, to support its plans for growth.

The firm said in an announcement that it's looking to bring its total capital up to USD 103 million by raising at least $47.5 million. More than $20.5 million has already been committed the company said, from a ‘friends & family’ group led by former Vontobel head of investment banking Roger Studer, and the Studer Family Office where he is chairman of the board.

Studer said in a statement he believes Bitcoin Suisse is ‘set to grow quickly’ based on a proven and reliable record of success. The startup provides bitcoin-based lending, staking, brokerage, custody, and tokenization services to corporate and institutional clients.

The company has already started the process of securing licensing as a Swiss bank.

CEO Arthur Vayloyan said in a statement that as the company makes the transition to a licensed Swiss bank … ‘establishing equity of more than CHF 100m will give Bitcoin Suisse a strong balance sheet. The Series A round will pave the way to accelerated profitability and growth in business volume’.

Bitcoin Suisse says its offering shares in its holding BTCS Holding AG. Shares will be offered on a group level up to 20 per cent with a minimum subscription per investor of ca. 257,000 USD (CHF 250,000). Subscription began on 1th May and will end on 15th June.

Heading for unicorn status?

While it remains to be seen how much the Series A round can raise, Bitcoin Suisse has ambitious aims to achieve a valuation of USD 1 billion by 2025 and push itself into tech unicorn territory.

Next year the company says it will launch a security token offering (STO), with an initial public offering (IPO) slated for 2022. It also has plans to transform its Liechtenstein-based operation into a fully-fledged bank.

Founded in 2013, monthly average revenue in the first quarter was USD 1.85 million, nudging up from a monthly average of $1.75 million achieved in 2019.

The Zug-based company employs more than 140 people at its offices in Switzerland, Liechtenstein, and Denmark.

Investors keen on Swiss crypto startups

Despite market unrest caused by the COVID-19 pandemic, Swiss crypto firms have been firmly on the startup financing radar.

Last month, crypto-asset manager Crypto Finance AG raised $14.5 million in Series B financing. That round was led by Asian investment house Lingfeng Capital, and Swiss investor Rainer-Marc Frey. QBN Capital and other smaller investors also participated in the Series B.

At group level, the company operates three entities: FINMA-regulated asset manager Crypto Fund AG; Crypto Storage AG, which provides custody infrastructure and tokenization; and Crypto Broker AG which is active in crypto trading.

The company said it would use its new financing to expand its products and services in the Asian market and is currently working closely with banking clients on asset tokenization and other direct forms of blockchain implementation. It’s also waiting on a license application to become a Swiss Securities House, which would enable it to trade derivatives.

Another crypto infrastructure startup Taurus Group raised $11 million in a Series A round.

Led by Arab Bank Switzerland, the round was completed in partnership with private Swiss bank Lombard Odier, the Tezos Foundation, and real-estate group Investis. Several unnamed strategic and private investors also took part in the round. Taurus' co-founders remain the company’s majority shareholders.

Founded in 2018, the Geneva-based company offers market infrastructure solutions for digital assets to institutional clients. Plans were announced in April that Taurus said it would expand its operational footprint with new offices opening in Frankfurt, Paris, and London. The firm aims to double headcount from 20 to 40 by mid-2021.

A spokesperson from Arab Bank said the company is paving the way for ‘the financial industry of tomorrow’ by helping banking clients leverage blockchain technology through asset tokenization and use of digital assets.

Arab Bank Switzerland has its own crypto offering, providing advisory, custody and brokerage services for ether and bitcoin. Support for XRP is due to be announced in May or June on a platform that uses Taurus's infrastructure.

How much Taurus has raised to date remains unclear. The firm hasn’t disclosed the total, well or its valuation. It has said previously that its 2019 revenues were ‘7-digit’.

Crypto a success story amid fintech funding crunch

According to Swiss tech association startup.ch, Swiss VC investments in the first quarter of 2020 declined by CHF 100 million over the same period last year. Analysts blame uncertainty caused by the COVID-19 pandemic and investor restraint.

The Swiss government's measures to shore up small businesses amid coronavirus lockdowns left many startups out in the cold. An emergency bailout fund of ca. $20.6 billion in state-backed facility grants and interest-free loans for SMEs is limited to 10 per cent of a company’s revenues or based on a multiple of wage bills from the previous 12 months.

In a survey of 430 tech firms by Swiss startup incubator VentureLab, 70 per cent said the support loan system was of no use. Most startups need years to build up a meaningful revenue stream and don’t offer large salaries in their early stages.

Speaking to news site SwissInfo, Zurich-based angel investor Daniel Gutenberg said it would be ‘all but impossible’ for new companies to raise funding in the next six months. Even late-stage/high growth startups might face difficulty.

The government in Bern says it is looking for a coronavirus support solution for startups, but that it is also inundated with appeals from other vital sectors. One option being considered is a formula that would let startups count money contributed by investors as revenues.

CV Labs, which supports blockchain startups, says the government needs to keep innovation that will benefit the economy in the long run on its policy radar.

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