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The valuation on the first day of listing was nearly 100 billion: How much did the angel investors behind Coinbase earn?



Coinbase (COIN.US), the largest digital currency exchange in the United States, was successfully listed on Nasdaq on Wednesday (April 14), marking another milestone in the development of Bitcoin and other digital assets.

The first major bitcoin-related company to test the waters in public U.S. markets, Coinbase opened at $381 on Nasdaq Wednesday, rose as high as $429.54 within minutes of trading, and closed at $328.28 in late trade. Based on the closing price, Coinbase's market capitalization reaches US$65.39 billion; if it is based on the number of fully diluted shares (including options and restricted employee stockholding), Coinbase's valuation reaches US$85.78 billion. By comparison, Intercontinental Exchange Group, which owns the New York Stock Exchange, has a market capitalization of only about $66 billion.

According to regulatory documents, Coinbase was founded in 2012 and has 56 million users worldwide. The assets on its platform are estimated to be as high as 223 billion US dollars, accounting for 11.3% of the encrypted asset market share. In September last year, Coinbase’s valuation was less than $6 billion, but this year has risen with the rise of Bitcoin—just before Coinbase’s listing, the prices of Bitcoin and Ethereum, the world’s top two cryptocurrencies, both hit history new highs.

The three major U.S. stock indexes collectively opened higher, and Coinbase opened up 5% on the second day of listing: the three major U.S. stock indexes collectively opened higher, the Dow rose 0.48%, the Nasdaq rose 0.90%, the S&P 500 rose 0.57%, blockchain, star Technology stocks generally rose. The trading platform Coinbase opened up 5% on the second day of listing, and closed up more than 31% yesterday. [2021/4/15 20:24:15]

There is no doubt that the listing of Coinbase is definitely a big event for cryptocurrencies and the cryptocurrency industry. You know, when this technology company was founded nearly a decade ago, Bitcoin was just "fledgling". After years of development, Coinbase has become a leader in the cryptocurrency ecosystem.

As the saying goes, "A thousand-mile horse is often found, but Bole is often hard to find." Coinbase has been able to go all the way since its inception, and it cannot do without those venture capital companies that are angel investors. Based on the latest valuation, Coinbase is more than 10 times higher than its last private equity financing in 2018, and more than 4,000 times higher than its A-round financing eight years ago.

The concept stocks in the blockchain listed in the United States have different rises and falls: Today, the US stock market closed, and the concept stocks in the blockchain listed in the United States rose and fell differently. Canaan Technology closed up 2.44%, Renren closed down 10.26%, China Online closed down 6.58%, Secoo closed down 14.4%, Xunlei closed up 5.57%, Cheetah Mobile closed flat, Lanting Jishi closed down 6.25% . [2020/4/3]

So, which venture capital firms immediately fell in love with this extremely dazzling "pearl" when Coinbase was still unknown? Below, let us take a good inventory.

In 2013, the famous investor Fred Wilson has become a prominent investor in the field of consumer technology. He has made early and highly profitable bets on popular technology companies such as Twitter, Zynga, Etsy and Tumblr. And by May of that year, he was targeting a new field that had never been explored before.

"For several years, we have considered and sought to invest in the bitcoin ecosystem," Wilson wrote on May 8, 2013, on his firm's Union Square Ventures blog site. "Today, we are delighted to be able to talk about our first investment in this space."

Quotes | Conceptual stocks in the US-listed blockchain generally closed down: US stocks closed today, and concept stocks in the US-listed blockchain generally closed down. closed down 2.99%, China Online closed up 0.75%, Secoo closed down 2.45%, Xunlei closed down 3.11%, Cheetah Mobile closed down 2.22%, and Lantingji closed up 6.21%. [2019/6/14]

That investment is Coinbase.

This is Coinbase’s Series A investment, and it also helped it become the first Bitcoin startup to complete a Series A round of funding. The size of this round of financing was $5 million, priced at 20 cents per share, and the company was valued at about $20 million at the time. In addition to Union Square Ventures, other participating investors include Ribbit Capital, SV Angel and Funders Club.

News | Bitmain issued an internal letter: the company will focus on computing power chips and will restart listing in the future: On March 26, Bitmain issued an internal letter announcing the adjustment of the organizational structure, with Wang Haichao as the company's CEO, and announced that the company will focus on digital currency and Artificial intelligence chips and products and services based on them.

At the same time, Bitmain stated that the company has sufficient cash and the supply chain is functioning normally. With the introduction of new products, sales performance began to increase month by month.

Bitmain stated that this round of IPO applications will expire in the near future, and the listing work will be restarted at an appropriate time in the future. [2019/3/26]

At present, after the listing of Coinbase, the value of the shares held by Union Square Ventures has reached about 4.6 billion U.S. dollars. As an avid user of emerging technology products, Wilson said that before becoming an angel investor in Coinbase, he was already a user of the Coinbase platform. "I buy and store bitcoin at Coinbase," he wrote.

For Union Square Ventures, Coinbase was the firm’s first crypto investment, with many others to follow. The company lists in detail on its website 15 cryptocurrency companies it has invested in since Coinbase, including Polychain Capital and MetaStable Capital and other professional funds in the blockchain field.

Quotes | Blockchain concept stocks listed in the United States generally fell: US stocks closed today, and blockchain concept stocks listed in the United States generally fell. Renren closed down 4.98%, Secoo closed up 2.32%, China Online closed down 1.49%, Xunlei closed down 0.97%, Cheetah Mobile closed down 0.71%, Lantingji closed down 1.73%. [2018/8/14]

While Union Square Ventures led Coinbase’s Series A funding round, the firm is not Coinbase’s largest outside investor today. This honor belongs to Andreessen Horowitz (aka A16Z), which holds approximately $9.7 billion worth of Coinbase stock (Note: All equity here is based on the information in the Coinbase prospectus. Due to is a direct listing, these early investors can sell immediately).

A16Z joined the ranks shortly after Union Square Ventures invested in Coinbase. Just 7 months after Coinbase closed its Series A round, A16Z led a $25 million Series B round, buying Coinbase stock at $1 per share.

A16Z subsequently continued to increase its stake in Coinbase through a $1.5 billion fund raised in 2012 and a late-stage fund, and even purchased some shares from Union Square Venture Capital Fund.

In October 2019, A16Z purchased $57.1 million worth of shares from Union Square Ventures at $23 per share, according to Coinbase’s prospectus. About a year later, Union Square Ventures sold another $30 million worth of Coinbase stock to A16Z at $28.83 each. Union Square Ventures sold about 28 percent of its stake in five separate transactions, including 3.52 million shares to A16Z, now worth a total of $1.2 billion.

It is worth mentioning that both Union Square Ventures and A16Z have participated in investment projects, not only Coinbase. Both have also invested in the chain game "NBA Top Shot" development team Dapper Labs, which is developing NFT projects. Dapper Labs' most famous previous projects include the popular CryptoKitties (CryptoKitties).

By late 2014, Barry Schuler, a partner at VC firm DFJ Growth, joined the Coinbase feast. At this point, cryptocurrencies have gradually gained widespread acceptance. Schuler is best known for leading the America Online (AOL) team.

Schuler said he made his first bitcoin purchase a year before investing in Coinbase. And the process of that transaction made him extremely dissatisfied. Schuler initially found a bitcoin seller on Reddit, and the two agreed to meet behind a convenience store. “I gave him $500 and he put some tokens in my phone,” Schuler recalled in a video interview.

Schuler said, "I know very well that if this is the way to buy bitcoin, bitcoin will not become mainstream. You have to have a platform. And through early work and groping in the field, the value of companies like Coinbase It becomes obvious."

Schuler said at the time that he wanted to lead the Series C round, but he needed to make sure Union Square Ventures' Wilson, along with Coinbase co-founders Brian Armstrong and Fred Ehrsam, were ready to form a board and have all the regulations in place to protect investors. . Ultimately, DFJ Growth led the $75 million round at $2.76 per share, valuing the company at about $500 million at the time. The return on this investment is currently as high as nearly 120 times.


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