In a SPAC merger with Victory Park Capital, Bakkt plans to go public on the New York Stock Exchange (NYSE) at an estimated valuation of $2.1 billion. Bakkt parent ICE has pledged a $50 million initial investment.
Crypto firm Bakkt, the subsidiary of Intercontinental Exchange, announced its merger with VPC Impact Acquisition Holdings as part of a business combination deal. The official announcement came on Monday, January 8 on the backdrop of the plans of Bakkt to go public on the New York Stock Exchange (NYSE).
The combined company will be listed as Bakkt Holdings with estimated valuations at $2.1 billion. Moreover, VPC, backed by investment giant Victory Park Capital, already conducted its IPO last year in September 2020. With this announcement, former Citi executive, Gavin Michael, joins Bakkt as its new CEO. Mr. Gavin shall be replacing interim CEO David Clifton who goes on to join the board of directors. Speaking on the latest development, Michael said:
“The average consumer holds a wealth of digital assets but rarely tracks their value and lacks the tools to manage and utilize them. I’m excited to join the management team of a company, at this important time in its expansion, whose vision is to bring trust and transparency to digital assets through innovation and technology and, through that process, unlock trillions of dollars currently held in customer and loyalty accounts and allow consumers to put them to work.”
The announcement also states that the Bakkt investors’ equity will roll into the new company “Bakkt Holdings”. Besides, ICE will also be contributing an initial investment capital of $50 million.
Growth of Bakkt in the Crypto Market before Going Public
In 2018, Intercontinental Exchange rolled out its crypto subsidiary Bakkt citing potential growth in the crypto space. Since then the Bakkt platform has been instrumental in bringing crypto investment solutions for users. Bakkt was the first to launch “physically-settled” Bitcoin futures contracts in the markets. Besides, the company also provides crypto custodial solutions for institutional players.
In a further announcement, Bakkt plans to roll-out its retail app Bakkt Cash by March 2021. Nearly 400,000 users have already signed-up for early access to the app. Users can use the Bakkt Cash App at retail partners like Starbucks. As per the WSJ report, Bakkt plans to raise an additional $532 million as part of the deal. John Martin, CEO of VPC Impact Acquisition Holdings said:
“With VPC Impact Acquisition Holdings, our aim was to identify a high-growth fintech company with competitive differentiation and significant white space, and we are pleased to have found a great match in Bakkt. The company has a strong position in one of the most well-funded and fastest growing areas of technological expansion, also evidenced by its diversified revenue generation model and pathway to near-term profitability. We thank Jeff, David and the ICE team for their vision and look forward to working with Gavin and the Bakkt team to grow its market-leading position in digital assets.”
Bakkt has been also making some important acquisitions over the last two years. In 2020, Bakkt acquired loyalty rewards provider Bridge2 Solutions. Besides, it also supports more than 30 loyalty program sponsors and over 200 gift card merchants.