Fundraising by cryptocurrency companies has seen a rapid rise in valuations as large investors push up prices, according to professional services firm PwC.<\/p>\n
Boutique firms and family offices are being elbowed out by big venture-capital names, private equity players and even some pension funds, PwC Crypto Leader Henri Arslanian said in a phone interview Thursday. Smaller venture capital firms are unhappy, he added.<\/p>\n
\u201cLet\u2019s say they\u2019re looking at a deal and they believe it\u2019s worth $10 million, and you\u2019re seeing large VCs come in and put a bid in for a higher valuation,\u201d he said. \u201cThis is happening a lot with very early-stage companies, say, $5 million to $20 million — the prices are being inflated.\u201d<\/p>\n
Crypto deals have heated up in recent months after gains in digital currencies and as investors debate the future of the asset class. Crypto M&A was about $3 billion in 2020 and a similar amount was probably raised in the last two to three months alone, Arslanian said.<\/p>\n
In July, derivatives exchange FTX raised $900 million from Softbank Group Corp. and others, valuing it at $18 billion. Digital-asset platform Fireblocks took in $310 million to attain a value of $2 billion.<\/p>\n
Challenges include how to discount for regulatory risk in such a new area and how to assess the valuation of businesses where many are only a few months or years old, Arslanian said. Another issue is lack of suitable assets to invest in, given many firms aren\u2019t that big or well-developed yet.<\/p>\n
\u201cIf your minimum ticket size is around $50 million, there aren\u2019t that many companies that have that status yet,\u201d he said. \u201cIf you\u2019re a large pension fund and you decided to make a crypto allocation, there are no more than two dozen companies around the world that are investable, looking for capital and could absorb $100 million.\u201d<\/p>\n
Fundraising by cryptocurrency companies has seen a rapid rise in valuations as large investors push up prices, according to professional services firm PwC.<\/p>\n","protected":false},"author":341034,"featured_media":407464,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[44696],"tags":[187,43378,6517],"class_list":["post-408172","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-bitcoin","tag-cryptocurrencies","tag-pwc"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/408172"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=408172"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/408172\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/407464"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=408172"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=408172"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=408172"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}