Crypto startup MoonPay hits $3.4 billion valuation in new funding round

MoonPay CEO and co-founder Evan Soto-Wright speaks at the Bitcoin 2021 conference in Miami, Florida.

Eva Marie Ozkategi | Bloomberg | Getty Images

Cryptocurrency startups have raised record funding this year.

It’s no surprise, then, that some of the major players in the space — from crypto exchange twin Winklevoss Gemini to Ethereum co-founder ConsenSys — announced massive new funding deals last week.

MoonPay, a relative newcomer, is taking the crypto-obsession with venture capital to new heights. The three-year-old fintech company said Monday that it has raised $555 million in its first-ever funding round. The investment, led by Tiger Global and Coatue, values ​​the company at $3.4 billion.

Founded in 2018, Miami-based MoonPay allows users to buy and sell cryptocurrency using traditional payment methods such as credit cards and bank transfers or mobile wallets such as Apple Pay and Google Pay.

It also sells its technology to other companies including crypto site Bitcoin.com and non-fungible token (NFT) market OpenSea, which CEO Evan Soto Wright calls “crypto-as-a-service.”

Soto-Wright said the company aims to make encryption available to the masses in the same way that video conferencing tools like Zoom have made it easier to make calls over the Internet.

“With blockchain and cryptocurrency, I think we are still in the telephony days,” he told CNBC in an interview.

“Eventually we will get to that place where there is no friction to transfer any amount of value anywhere in the world, and costs are as close to zero as possible.”

Paypal for Cryptocurrency

With the prices of Bitcoin and other cryptocurrencies hitting new highs recently, venture capital investment in market-supporting startups is booming. Investors are looking for the next Coinbase after the crypto giant’s list in April.

MoonPay’s offering to investors is that it provides a “gateway” to digital assets. Currently, this includes bitcoin, ether, and other digital tokens such as NFTs. But Soto-Wright’s vision is to expand the platform to include everything from digital fashion to token stocks.

“People call us like PayPal, but for encryption,” he said.

Soto-Wright said the company has robust controls and checks in place to deal with money laundering. Regulators are becoming increasingly wary about illegal activity in the market.

MoonPay says it’s been profitable since launching its platform in 2019. The company is on track to generate $150 million in annual revenue this year after transaction volumes increased 35-fold as of 2020. Its service is now used by more than 7 million customers.

However, the company faces stiff competition, not least from fintech pioneers such as PayPal, which launched its own crypto features last year.

Soto-Wright said he’s not worried about the competition. He described PayPal as a “walled garden” that does not give users control over their assets. “We believe that the future of cryptocurrency is about customers having their own private keys,” he said, which are passwords that give people access to their funds.

underwriting ambitions

Looking to the future, MoonPay plans to spend the money raised on new products and expansion. Soto-Wright said the company already has ambitions to launch the business. “We have aspirations to eventually be a public company,” he said.

However, cryptocurrencies are known to be volatile, and this has affected even the most popular players in the field. Coinbase, for example, missed its third-quarter sales estimate after a drop in monthly users.

Bitcoin reached an all-time high of nearly $69,000 earlier this month, but has since fallen by about 17%. Meanwhile, Ether is down 13% from its record high.

Soto Wright said MoonPay is prepared for a possible pullback in the cryptocurrency markets, adding that the company is “neutral” about the assets it supports.

“In the same way that VoIP (Internet Protocol) communications are disrupted, we believe that over time, financial services and all these different applications will be disrupted by the blockchain,” he said.

“Obviously there will be volatility as the market tries to figure out the assets, and which blockchains will eventually be adopted.”

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