Coinbase is finalizing a deal with Tiger Global that will value the company at $8 billion and make the San Francisco-based company one of the richest startups in the world, Recode reports.
Tiger Global appears ready to make a $500-million investment in Coinbase, one of the most popular cryptocurrency exchanges in the U.S., and the company “is expected to add about $250 million in new money to its own coffers,” while possibly using another $250 million to buy out existing investors, according to Recode.
Per the report:
The company, which has disclosed that it is profitable, has been talking with investors for almost all of 2018 about a secondary stock sale that would allow existing investors to cash out without the company neccessarily raising new, fresh money for itself. Inbound interest was so high at one point that the company issued a stern warning to dealmakers to back off from the company and its shareholders.
That secondary sale, though, has moved extremely slowly, and a final deal was never reached. A Coinbase spokeswoman declined to comment.
Recode notes that Coinbase was valued at just $1.5 billion in the summer of 2017, but that was before the massive run-up in prices for Bitcoin and other cryptocurrencies. That would explain the dramatic spike in its valuation, although the downturn this year for the crypto market has not done Coinbase any favors.
The company’s core business has suffered since then with the sell-off in crypto prices this year, people familiar with the matter say, though executives like CEO Brian Armstrong have said they are not focused on momentary peaks and valleys in trading volume and focus instead on “building an open financial system for the world.”
Coinbase took a significant step toward building on its blockchain-based identity security efforts in August by acquiring Distributed Systems, a five-person strong San Francisco-based startup, which has been developing an open identity standard for decentralized apps, or dApps. In April, the company acquired Earn.com, a U.S.-based startup that offers a decentralized paid-email service utilizing blockchain technology, and named Balaji Srinivasan, co-founder and CEO of Earn.com, its first chief technology officer.
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