- Fintech firm MoonPay on Monday said it has raised $555 million in its first funding round.
- The investment, led by Tiger Global and Coteau, values the company at $3.4 billion.
- Moonpay lets users buy cryptocurrencies using traditional payment methods like credit cards.
Cryptocurrency start-ups have raised record funding this year.
It should come as no surprise, then, that some of the major players in the space – from the Winklevoss twins’ virtual currency exchange Gemini to Ethereum co-founder Joseph Lubin’s blockchain start-up ConsenSys – have announced massive new funding deals in the last week.
Moonpay, a relative newcomer, is taking the crypto craze in venture capital to new heights. The three-year-old fintech firm on Monday said it has raised $555 million in its first funding round. The investment, led by Tiger Global and Coteau, values the company at $3.4 billion.
Founded in 2018, Miami-based MoonPay’s software lets users buy and sell cryptocurrencies using traditional payment methods such as credit card, bank transfer or mobile wallets such as Apple Pay and Google Pay.
It also sells its technology to other businesses, including crypto website Bitcoin.com and non-fungible token (NFT) marketplace OpenSea, a model CEO Ivan Soto-Wright calls “crypto-as-a-service”.
Soto-Wright said the firm aims to make crypto accessible to the public in the same way that video-conferencing tools like Zoom have made it easier to make calls over the Internet.
“With blockchain and cryptocurrencies, I think right now we are in the days of dial-up,” he told Businesshala in an interview.
“Eventually we’ll get to a place where moving any quantity of value anywhere in the world is frictionless, and costs as close to zero as possible.”
With the price of bitcoin and other cryptocurrencies hitting all-time highs recently, venture capital investment in start-ups that power the market is booming. Investors are looking to Coinbase next after the crypto exchange giant’s blockbuster listing in April.
MoonPay’s pitch to investors is that it provides a “gateway” to digital assets. For now, this includes other digital tokens such as bitcoin, ether, and NFTs. But Soto-Right’s vision is to expand the platform to include everything from digital fashion to tokenized stocks.
“People are calling us the same as PayPal, but for crypto,” he said.
Soto-Wright said the company has strong controls and investigations to combat money laundering. Regulators have become increasingly cautious about illegal activities in the market.
Moonpay says it has been profitable since launching its platform in 2019. The firm is on track to reach $150 million in annual revenue this year after increasing transaction volume 35x since 2020. Its service is now used by over 7 million customers.
Still, the company faces stiff competition, not least from fintech pioneers like PayPal, which rolled out its crypto features last year.
Soto-Wright said he is not worried about the competition. He described PayPal as a “walled garden” that doesn’t give users control over their assets. “We believe that the future of CryptoKitties is about giving customers access to their private keys,” the passwords that give people access to their funds, he said.
Looking ahead, Moonpay plans to spend the money raised on new products and expansions. Soto-Wright said the firm already has ambitions to take the business public. “Our aspirations are to eventually become a public company,” he said.
However, cryptocurrencies are notoriously volatile, and this has affected even the most well-known players in the space. Coinbase, for example, missed sales estimates for the third quarter following a drop in monthly users.
Bitcoin hit an all-time high of around $69,000 earlier this month, but has since fallen about 17%. Meanwhile, Ether is down 13% from its all-time high.
Soto-Wright said Moonpay is prepared for a possible downturn in the crypto markets, adding that the firm is “agnostic” on which assets it backs.
“The way telecommunications got disrupted by Voice over IP (Internet Protocol), we think that over time, financial services and all these different applications will be disrupted by blockchain,” he said.
“Obviously there is going to be volatility as the market tries to figure out which assets, which blockchains are going to be eventually adopted.”