Despite the seemingly never-ending price drops of most of the major cryptocurrencies in the last 2 months, some good news is finally on the table with Hong Kong-based cryptocurrency trading startup Amber Group, announcing on Monday that it has raised $100 million in a Series B funding round at a pre-money valuation of $1 billion. (Any investors secretly hoping this pushes the price of Bitcoin up?)
This news comes as more mainstream investment capital firms are hopping on the crypto bandwagon as investors increasingly consider bitcoin an investable asset, despite the recent price drops of most of the bigger cryptocurrencies.
This latest valuation is ten times that of the company’s Series A closed in 2019, a $28 million round that counted Coinbase Ventures as one of its investors. Most prominently, Amber’s Series B financing was bankrolled by a list of high-profile financial and VC firms, including China Renaissance, which led the round, and Tiger Brokers, Tiger Global Management, Arena Holdings, Tru Arrow Partners, Sky9 Capital, DCM Ventures, and Gobi Partners.
It’s past investors which included Pantera Capital, Coinbase Ventures, and Blockchain.com also participated in this latest round.
In May this year, as Bitcoin was flying to new highs, Babel Finance, another crypto asset manager based out of Hong Kong, secured $40 million in funding from several big-name institutional investors, including Amber’s investor Tiger Global.
Amber Group is a leading global crypto finance service provider operating around the world and the clock with a strong presence in Hong Kong, Taipei, Seoul, and Vancouver. Founded in 2017, Amber Group services over 500 institutional clients and has cumulatively traded over $330 billion across more than 100 electronic exchanges, with over $1 billion in assets under management.
Amber was established by a group of former investment bankers and finance professionals from Morgan Stanley, Goldman Sachs, and Bloomberg. These youngsters, all of whom were in their twenties, were eager to shake things up. Initially, Amber set out to apply machine learning algorithms to quantitative trading but subsequently swivelled in 2017 to cryptocurrency when the team noticed spikes in virtual currency’s trading volumes.
Today, the startup assists both institutional and individual investors by offering them algorithmic trading, electronic market-making, high-frequency trading, OTC trading, borrowing and lending, and derivatives, amongst other products.
The firm also has a mobile app, launched in the third quarter of 2020, increasing its scope from the more traditional institutional clients to accommodate the huge demand for retail consumers. The startup has claimed that its app ‘has accumulated over 100,000 registered users’ to date.
According to its co-founder and CEO Michael Wu, Amber has been quite profitable since its commencement into the trading world, with annualized returns of $500 million based on figures from January to April of 2021.
Mr Wu stated that Amber has seen “record months over the past quarter across both client flow and on-exchange market-making volumes, with 2-3% of total trading volumes in major spot and derivative markets.”
Cumulatively, trading volumes have doubled from $250 billion since the beginning of the year to a whopping $500 billion.
Altogether, it manages around $1.5 billion in trading capital that varies based on BTC and ETH prices.
This is much-needed news for the Crypto market, with continued investments such as this expected to push Cryptocurrencies back into a more positive stance.