Case Study: Valuing a Crypto-Based Startup
This article describes important crypto valuation stats through case studies of recently funded crypto startups presented below.
There are several factors to consider when determining the crypto valuation for determining the worth of your crypto startup. If you’re getting ready for funding rounds and seeking investors, it’s critical to consider how your company differs from others in the market, who your rivals are and how you vary from them, the size of your market potential, and the level of demand for your product or service. In order to demand an appropriate amount of funding and make your case to the investors, you will need to gather and go through available crypto startups funding stats and crypto startups’ valuation stats. Through this article, readers can gather important crypto valuation stats through case studies of recently funded crypto startups presented below.
Crypto funding and valuation
Startups in the crypto world mostly employ crypto valuation when negotiating with possible funders. A crypto startup requires a financial model that will function in different market situations and can be used as a basis for decision-making in addition to a high-quality blockchain product. The cryptocurrency sector offers a singular chance to invest in tokens, whose legal status is still not entirely apparent in many nations, in addition to typical stock funding. Knowing how to fairly negotiate the purchase or sale of crypto tokens and raise funds at various stages is helpful for crypto firms.
What is a crypto startup?
To comprehend crypto startup, let’s go back to fundamentals and break it down “word for word”. Crypto is an abbreviation for “cryptography”. It generally describes the key elements and subjects of creating and using cryptography technologies, such as cryptocurrency. Startups are businesses in the early stages of development. A crypto startup is a company that works with cryptocurrencies. In recent years, these industry-focused startups have sprung up all over the globe. With the development of cryptocurrencies such as Bitcoin, Ethereum, and others, many entrepreneurs are hoping to launch their own crypto or blockchain-based firm.
Evolution of crypto
With 14 million Bitcoins already in circulation, cryptocurrencies, particularly Bitcoin, have shown their worth recently. Most of the present market capitalization has been driven by investors speculating on the potential uses of this new technology, and this is expected to continue until a certain level of price stability and market acceptability is attained.
Cryptocurrency’s underlying blockchain public ledger technology, which has the ability to upend a broad range of transactions in addition to the conventional payment system, holds power over investors. These include stocks, bonds, and other financial assets with digitally recorded records for which a dependable third party is now required to offer transaction verification. Investors seem to depend on a belief in the underlying worth of cryptocurrencies rather than just the proclaimed price. This covers the decentralized network, the security of the cryptographic code, and the technology and network itself.
The important players will likely determine the rate at which the cryptocurrency market develops, and this pace will likely be marked by growing spurts of credibility from one or more of these players during what we refer to as credentialing moments. Each of the five essential market players and customers, tech developers, investors, financial institutions, and regulators, will play a part in assisting the market advance to the next stage in its development toward widespread acceptance and steady growth.
Why is building a crypto startup a good opportunity?
Here are the reasons to consider building a crypto startup:
- Growing user base – Crypto companies offer entrepreneurs an undiscovered market. Every year, more customers embrace cryptocurrencies, which means the consumer base is constantly growing. This expanding area offers several options to make commercial gains.
- Lack of regulations – Unregulated markets are another motivation to create a blockchain or crypto firm. As these technologies are relatively young, governments haven’t aggressively controlled them. You can join the market before regulations are implemented. It lowers entrance barriers and accelerates expansion.
- Infancy stage – The new crypto business offers several opportunities since it is in the early stage. The best method to establish a successful company is to target a specialized market with high demand. For example, the financial industry.
- High security – Secure, decentralized, transparent blockchain technology improves data ownership and transactions. Encrypting a new block on the chain enhances its security. Once a transaction is registered on the blockchain, it’s immutable. Because so many individuals continuously watch each transaction, tampering is almost impossible.
Why is investing in crypto startups a good idea?
The majority of individuals often disagree on how pricey the fees imposed by any financial institution might be in starting a crypto startup. However, one of the alluring qualities that have everyone deciding to use cryptocurrency is the ability to avoid exactly the same. By relying on private and public sources for safety, cryptocurrency allows users to avoid the arbitrary fees charged by most banks and financial institutions for flexible transfers. Cryptocurrencies make it casual to move money between two parties involved in a transaction, and capital exchanges are done with negligible fees. However, if you want to avoid outrageous costs, be aware that the risk of hacking does not apply to cryptocurrencies. Because of this, a computer crash may completely wipe away a digital coin balance if there is no backup copy of the assets.
Evaluation of crypto and its investment
Last year, venture capital financing for international crypto startups increased by 713%. Global crypto startups received $25.2 billion in venture capital investment last year, rising 713% from $3.1 billion in 2020, according to a CB Insights report.
The research compiles information from over 3,000 blockchain and crypto startups that the company routinely monitors, totaling over $3 billion in private marketing investment. The survey also revealed that the United States generated $6.26 billion for 1 57 projects in Q4 last year, leading the world in financing deals. The report states that rising institutional and consumer demand for cryptocurrency-related goods and services has been a major driver of worldwide development.
According to Fireblocks CEO Michael Shaulov, the main barrier to institutional involvement has decreased due to investors’ increased focus on custody and wallet providers. For organizations and people, having a direct custody solution and technology that can plug and play with the crypto capital markets is a game-changer.
In order to invest in a crypto project, one must consider crypto valuation and crypto valuation stats to understand the business. It’s crucial to analyze a crypto project’s numerous elements before investing. Impulsive, emotional judgments might cost you money. Use the figure below to know what you need for a crypto valuation.
Recently funded crypto startups
For crypto startups, the first quarter was a boom time. In Q1 2022, crypto entrepreneurs received more money than ever before and broke records in various measures. Despite the worries of a severe downturn, investors are pouring money into the growth and development of crypto startups.
Top 4 crypto startups that hit a remarkable valuation
With hundreds of millions of dollars in new funding, crypto startups are off to a strong start despite investors’ growing concern about a sharp decline in the value of digital assets. Let’s look at the top 5 crypto startups recently funded that hit amazing valuation marks.
The crypto craze in venture capital is reaching new heights owing to MoonPay, a recent addition. The three-year-old fintech company’s initial investment round netted $555 million. The crypto startup is valued at $3.4 billion, attributable to the investment from Tiger Global and Coatue.
MoonPay, a Miami-based company founded in 2018, offers software that enables users to purchase and trade cryptocurrencies using standard payment methods, including credit cards, bank transfers, or mobile wallets like Apple Pay and Google Pay. In a business model CEO Ivan Soto-Wright refers to as “crypto-as-a-service,” it also offers its technology to organizations like non-fungible token (NFT) exchange OpenSea and cryptocurrency website Bitcoin.com.
The portal to digital assets is the selling point of MoonPay to potential investors. For the time being, this entails bitcoin, ether, and other electronic coins like NFTs. According to Soto Wright, the platform will be expanded to encompass anything from digital fashion to tokenized equities. He draws comparisons between Moon Pay and PayPal but for cryptocurrency.
MoonPay claims that since the platform’s introduction in 2019, it has been profitable. The company’s revenue is on pace to reach $150 million this year after transaction volumes grew 35-fold from 2020. Over 7 million consumers presently utilize this service. However, the business confronts fierce competition, not least from early adopters of fintech like PayPal, which unveiled its own cryptocurrency capabilities last year.
A crypto startup called ConsenSys has secured $450 million in a fresh round of fundraising, more than doubling its estimated value to $7 billion. Microsoft, Japan’s SoftBank, and ParaFi Capital were also involved in the funding, and Temasek of Singapore also participated in the business as a new investor.
Joseph Lubin, a co-founder of Ethereum, launched ConsenSys in 2014, with its headquarters in New York. Software created by ConsenSys for the Ethereum network. Investors consider ConsenSys to be one of the businesses that will fuel Web3. It has profited from a wave of investment into new crypto trends, including non fungible tokens (NFTs) and Defi. The Ethereum app development toolkit Infura and the cryptocurrency wallet MetaMask are among the company’s best-selling goods.
Microsoft has made a rare crypto-related wager with this. Previously, the business oversaw a capital invested in Lubin’s co-founded crypto startup, Palm NFT Studio. Microsoft’s engagement demonstrates rising interest in Web3 from the biggest IT companies in the world.
ConsenSys said the money raised in its most recent round would be turned into the ether. The money will be used to expand ConsenSys’ expanding NFT company, hire 600 more workers, and revamp MetaMask, which will be released later this year.
The biggest fundraising round for an Indian crypto startup, $260 million, was obtained by CoinSwitch Kuber, a platform for retail dealers that offers cryptocurrencies. Coinbase Ventures, the corporate venture branch of Nasdaq-listed Coinbase Inc., and Silicon Valley-based venture firm Andreessen Horowitz jointly oversaw the financing. Coinbase Ventures has contributed $150 million to the latest round, compared to $80 million from Andreessen Horowitz. The remaining capital came from pre-existing shareholders Tiger Global, Paradigm, Ribbit Capital, and Sequoia Capital India.
As a worldwide aggregator of cryptocurrency exchanges, Singhal, Govind Soni, and Vimal Sagar Tiwari established CoinSwitch Kuber in 2017. In June 2020, the crypto startup debuted CoinSwitch Kuber, a cryptocurrency platform available only in India. Since then, the number of users signing up has increased by 1,800%. The network claims to have 7 million active users, all from India, surpassing the 11 million registered user threshold. It has been using social media and TV commercials throughout the Indian Premier League as part of an aggressive marketing campaign to attract new consumers.
After receiving this financing, CoinSwitch Kuber’s value increased by about four times to $1.9 billion, up from around $500 million less than six months before. As unprecedented amounts of money continue flowing into the local crypto startup ecosystem, it became the 30th Indian unicorn this year. This money is crucial for a variety of reasons. It happens at a time when the regulatory environment for the industry in India is still unknown, yet renowned investors have placed a risky investment.
The business will spend the money on product development and education programs while aggressively recruiting tech expertise to grow its user base to 50 million. It has also planned a wide range of activities, such as establishing an ecosystem fund to finance cryptocurrency companies in India and facilitating institutional investments. With this significant cash infusion, Coinswitch Kuber hopes to broaden its product offering to include financial items other than cryptocurrencies and grow to be the “next major fintech company in India”.
In the Series E round, co-led by D1 Capital Partners and Spark Capital, Fireblocks Inc. raised $550 million. Fireblocks Inc., a crypto startup, peaked valuation at $8 billion in its most recent fundraising round, four times its worth in July, owing to investors like an Alphabet Inc.-affiliated development fund. General Atlantic, Index Ventures, and Parafi Growth Fund were among the investors in addition to CapitalG, the autonomous Alphabet fund that oversees over $3 billion.
According to Fireblocks Chief Executive Officer Michael Shaulov, whose business offers various cryptocurrency-related services, such as custody and tools for minting digital tokens, it was CapitalG’s second cryptocurrency investment. According to him, Fireblocks would utilize the money to make acquisitions and grow in areas like payments.
Why is choosing Eqvista a great initiative for your crypto valuation?
Are you unsure where to begin valuing your cryptocurrency startup or assets? You can rely on Eqvista for all of your valuation requirements. The team at Eqvista has created strong tools and solutions that aid in offering a fair crypto valuation assessment with their extensive expertise in the financial industry and the cryptocurrency market. You can be certain that all of our valuation reports are accurate and transparent due to our extensive understanding of both the cryptocurrency business and the world’s financial markets. This makes it possible for you to choose the finest business strategies, find the right investors, and accomplish your objectives. Learn more about the value of cryptocurrencies and get help when necessary. Contact us today to learn more!
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