Thu, Apr 04, 2019 - Page 11 News List

Japanese crypto start-up hits rare US$1bn valuation

Bloomberg

Liquid Group Inc, a Tokyo-based cryptocurrency trading platform, yesterday said that it had raised venture funds at a valuation in excess of US$1 billion, making it one of the rare so-called “unicorns” in Japan.

The start-up has secured funding from investors such as venture fund IDG Capital and crypto mining giant Bitmain Technologies Ltd, it said in a news release, but in a somewhat unusual step did not disclose how much money it had taken in.

Liquid has commitments for about US$50 million, a person familiar with the matter said, a small amount for the lofty valuation.

Start-up valuations are viewed skeptically if the amount of capital raised is less than 10 percent.

That is not to take away from Liquid’s progress in building its business, including securing a coveted crypto exchange license from the Japanese Financial Services Agency and handling more than US$50 billion in cumulative trading volume.

IDG is also a marquee investor, having funded crypto start-ups such as Coinbase Inc and Bitmain.

Crypto start-ups have a history of pushing aggressive valuations. In June last year, Circle Internet Financial Ltd raised US$110 million, valuing the mobile payments and crypto trading platform at US$3 billion.

Coinbase in 2017 raised US$100 million at a valuation of US$1.6 billion. Non-crypto start-ups tend to raise even larger in their unicorn rounds.

Liquid, founded in 2014 and previously known as Quoine, raised the latest funds as part of its ongoing Series C round.

Cofounders Mike Kayamori and Mario Gomez Lozada had raised more than US$20 million in prior rounds from investors, including Jafco Co.

Separately, the founders raised US$100 million through an initial coin offering in 2017.

The new funding is to be used for global expansion and comes amid rising optimism that last year’s brutal correction for crypto assets is coming to an end.

Bitcoin has jumped more than 20 percent this week to its highest in five months.

Japan has few start-ups valued at more than US$1 billion, as loose listing rules make it easy for founders to go public sooner than in other nations.

Online flea market operator Mercari Inc became Japan’s first unicorn in 2016. At the time, the US already had 92 unicorns.

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