Only two weeks after announcing the acquisition of North American bitcoin exchanges Coinsetter and Cavirtex, Kraken today revealed a multimillion dollar investment from SBI Investment, the venture capital subsidiary of $2 billion dollar Japanese conglomerate SBI Holdings. The terms of the deal were not disclosed.
In addition to investing, SBI Investment will lead the Series B round of financing in Kraken. SBI Holdings CEO Yoshitaka Kitao commented:
“We knew that we wanted to invest in Bitcoin and the blockchain. We wanted a company that would be a wise strategic investment. Kraken has been a leading global bitcoin exchange for years. They have grown tremendously during that time while building a strong reputation as one of the most innovative, secure, compliant, and reliable companies in this emerging financial services area. Kraken was the clear choice.”
Kraken CEO Jesse Powell said:
“SBI’s investment means a lot to us. We’re proud to have such a strong strategic partner leading our round. It’s a fantastic first step toward completing Series B, which will ultimately enable us to scale our business worldwide. Kraken will be prepared to meet the fast-increasing demands of an emerging ecosystem of blockchain-enabled assets.”
As a group, SBI has been making various moves into the blockchain technology space. The financial services corporation recently formed a joint venture with Ripple to sell and install Ripple’s enterprise solutions for cross-border payments at banks across the Asian region. SBI Sumishin Net Bank, a subsidiary jointly owned with Sumitomo Mitsui Trust Bank, partnered with both Dragonfly Fintech and Nomura Research Institute to roll out a NEM blockchain solution for financial services.
The overall SBI group generated operating revenues of ¥245 billion in 2015, approximately more than $2 billion dollars, including an operating income of ¥68.2 billion or approximately $570 million. The Japan-based conglomerate consists of 208 companies operating in approximately 20 countries and regions, in sectors including financial services, asset management and biotechnology. SBI originally was a subsidiary of SoftBank, a major Internet and telecommunications firm in Japan, but was completely spun off in 2006.
In March 2014, Kraken completed a $5 million in Series A financing round led by Hummingbird Ventures with participation from Blockchain Capital and Digital Currency Group, among others. In the 22 months since, Kraken claims to have made over $1.4 billion in transactions on the platform while trading bitcoin and other digital assets for euros, US dollars, Japanese yen, British pounds, and Canadian dollars.
In 2014, Kraken was also selected by the Tokyo’s court appointed trustee to assist MtGox creditors in the investigation of missing bitcoins, in filing claims, and in distributing remaining assets. As of September 2015, 202,159 bitcoin and $11,474,707 USD is expected to be disbursed to approximately 25,000 creditors.