By
Mayowa Adebajo
April 11th, 2024
As per sources familiar with the matter, the existing shareholders are to raise their stake in Deribit at a discounted valuation following the recent market turmoil.
On Monday, September 26, crypto derivatives exchange Deribit announced that it has raised funds from its existing shareholders at a $400 million valuation. Some of the existing shareholders of Deribit include Akuna Capital, QCP Capital, and Dan Tapiero’s 10T Holdings.
As per sources familiar with the matter, the Panama-based exchange raised a total of $40 million in the deal. Deribit has successfully managed to sail through the crypto market turbulence this year. Amid the collapse of the crypto hedge fund Three Arrows Capital (3AC), Deribity had to take a small hit by liquidating its positions as 3AC failed to meet the margin calls.
As per the sources, Deribit has now raised this fresh capital to restore its reserves as they were before the 3AC fall. These sources also added that considering the current circumstances of the Deribit exchange, the latest fundraising happened at a strong discount for existing shareholders. During its last funding round in August 2021, the valuation of Deribit stood at $2.1 billion. Back then, the company had raised $100 million. Speaking to The Block, Luuk Strijers, Deribit’s chief commercial officer said:
“The $400 million valuation “is essentially irrelevant” because the fundraising is from existing investors. It could have been any value. It’s more a clawback of dividends from existing shareholders. We paid a high divided before and decided it’s more prudent to strengthen our balance sheet and retain assets instead of distributing them to shareholders.”
As per Strijers, the company’s true valuation doesn’t come to the surface until it conducts external fundraise. “A company’s valuation matters only matters when you raise externally,” he said. He also added that Deribit kept its valuations low to “avoid discussions” with investors.
About Deribit Exchange
Founded in 2016, the crypto derivatives exchange Deribit caters mainly to institutional investors. It is also one of the largest Bitcoin options exchanges by market share.
The Deribit crypto exchange has claimed more than 88% share of open interest in bitcoin options trading. Also, the daily trading volume on the Deribit exchange goes to billions of dollars. Last year, Deribit exchange entered into a partnership with ML Tech which is a high-frequency trading (HFT) platform.
This partnership is mutually beneficial. As stated above, ML Tech gets many advantages from the partnership, but Deribit as well enjoys a significant boost in trading volume due to the increased use on the platform in ML Tech’s strategies.