By
Godfrey Benjamin
April 17th, 2024
Crypto exchange Kraken recently assembled a team with significant IPO experience as it plans for the future.
Kraken is reportedly filling its C-suite team with people experienced in initial public offerings despite the IPO market remaining closed. Experts suggest that the US crypto exchange is playing the waiting game and positioning itself for the long term.
Kraken believes that the “short-term” hurdles experienced in the digital asset space would eventually give way to better fortunes. Amid its global retrenching, the San Francisco-based company looks to onboard executives experienced in taking companies public. Kraken’s decision to assemble an IPO team suggests that the crypto exchange views a listing in the future.
In an email, a Kraken spokesperson explained that the recent hires reflect a company and industry maturation. As it stands, the US exchange’s board now has four members, including two outside directors – one of whom is an independent contractor.
Foley and Lardner partner Patrick Daugherty commented on this development and what it portends for Kraken. According to the international law firm partner:
“If they do [have more independent directors], that’s probably a sign of two things; one is maturity, as that’s the right way to do it. And it could also be a sign that they’re looking to go public, either by de-SPAC or IPO.”
Notable IPO Entrants to Kraken Team
Last month, Kraken appointed Dan Ciporin to its board of directors. In addition to Ciporin, CEO of a special purpose acquisition company (SPAC), the company also hired several highly experienced financial executives. These include Carrie Dolan as a chief financial officer, C.J. Rinaldi as a chief compliance officer, Guy Hirsch as managing director US, and Blair Halliday as Hirsch’s UK counterpart.
Ciporin and Dolan are two seasoned IPO specialists who notably spearheaded LendingClub’s IPO in 2014. At the time, the IPO was one of the most significant in US history. It is also worth noting that Dolan subsequently paid a fine for questionable practices in that public offering. Nevertheless, the Kraken IPO team may already be working on prepping the company for a possible upcoming public listing.
Kraken previously hinted that it could follow in Coinbase’s footsteps with a direct listing. However, the US exchange presently remains tightlipped about an update. A spokesperson offered:
“We are always exploring various strategic options to ensure we continue to do what’s best for the business and its stakeholders.”
The US IPO market was effectively shuttered last year due to higher volatility and declining valuations. In fact, a PWC report stated that IPO proceeds were at their lowest since the 2008 meltdown. Furthermore, the report also revealed that 2022 saw the lowest number of offerings in six years.
Oppenheimer equity analyst Owen Lau pointed out that the decline in IPOs last year went beyond the crypto space. In addition, Lau noted how incessant interest rate hikes were contributing causes to an underwhelming market. As the Oppenheimer equity analyst put it, “it’s still pretty challenging the market, it’s still pretty volatile, the Fed keeps raising interest rates. It’s not just crypto companies, overall, the listing environment is challenging for everybody.”
Last November, Kraken laid off 1,100 employees, amounting to 30% of its workforce.