According to people with knowledge of the discussions, FTX is in talks with investors to raise up to $1 billion in new funding that will keep the company's valuation at $32 billion.
Sources who asked not to be named said that the talks are confidential and that the terms could change. Following FTX's last capital raise in January, coindesk reported on an investment at a flat valuation. SoftBank's Vision Fund 2 is an existing investor.
An FTX spokesman wouldn't say anything.
FTX has tried to portray itself as the market consolidator, swooping in to buy distressed assets at a discounted price. The company, which is based in the Bahamas, is privately held so it hasn't suffered the stock meltdown of Coinbase, which has lost three-quarters of its value in the last two years.
The sources said that some of the fresh capital would be used to fuel more deal-making. FTX signed a deal that gave it the option to buy BlockFi and the company was in talks to acquire Bithumb. FTX tried to buy a bankrupt broker in August, but was turned down for a low bid.
Bankman-Fried, who owns a significant stake in the online broker, has denied any active discussions are underway, despite a report in June that FTX was attempting to buy it.
According to a leaked investor deck, FTX's revenue soared more than 1,000% in 2021. FTX had net income of $388 million last year, up from $17 million the previous year. The company raked in $270 million in revenue in the first quarter.
The market was high at that time. In the second quarter, rising interest rates and a four-decade high in inflation caused investors to pull out of riskier assets. Since the end of March, there has been a significant decline in the price of both ether and bitcoins.
Three years ago, Bankman- Fried founded FTX. Bankman-Fried is betting that the market will rebound and that he will be able to make a lot of money when it does.
San Bankman Fried is a 30-year old billionaire.
All Rights Reserved © 2024
