American Financial Market Company, Intercontinental Exchange’s yet-to-launch Crypto exchange platform Bakkt has garnered USD740 million valuations after it bagged more than USD180 million in last year’s funding. The trading platform Bakkt, which has to be launched and continues to liaise with regulators, could soar up its valuation even further should it raise more funds. However, reports noted that a key question remained among investors about how they will make their projected returns, given the current regulatory barriers and Bakkt has yet to official launch.
According to the report, from a cash-flow perspective, Bakkt will not be earning much based on their proposed contract fees, so they really need a lot of volumes. It also reported that a lot of things will need to line up for investors to receive returns that they would typically expect for a Series A. The reports further revealed that the United States Commodity Futures Trading Commission (CFTC) remains in talks to clear up things around Bakkt’s operations which have seen delays in its debut several times. Moreover, according to their US SEC filing, if Bakkt cannot deliver on its plan to garner institutional adoption, or find other cash-flow sources, investors have equity redemption rights provided by ICE.
Bakkt’s valuation pre-launch comes out as the regulatory landscape in the U.S. surrounding crypto products remains uncertain across the board. Additionally, reports noted that Bakkt could now likely to increase its pre-money valuation to USD1 billion at its next raise. It could then vend a sequence of similarly-priced preferred shares without thinning out itself much.