Crypto exchange KuCoin raises funds at $10 billion valuation

KuCoin’s valuation has surged to $10 billion in its first financing round in four years as the global cryptocurrency exchange looks to make a deeper push into broadening its web3 ecosystem, it said Tuesday.

The Seychelles-based firm said it has raised $150 million in a pre-Series B financing round led by Jump Crypto. Circle Ventures, IDG Capital and Matrix Partners also participated in the new round, KuCoin said.

The four-year-old platform is valued at $10 billion in the new round, up from $100 million following its $20 million Series A in November 2018, KuCoin chief executive Johnny Lyu told TechCrunch.

KuCoin, which has amassed over 18 million users in 200 countries and regions and is one of the largest exchanges by daily SPOT trading volume, plans to invest the fresh funds in broadening its portfolio of crypto wallets, GameFi, DeFi and NFT platforms and DAOs, Lyu said. “This is how everyone is brought into the ecosystem, and the value of the ecosystem in turn depends on the size and loyalty of these participants,” he said.

“This concept is essentially why we raised this round, web3 is about openness, and we want to build KuCoin into an open ecosystem and an open system needs to bring many friends on board. The world of crypto is so new that we want to make sure we can leverage all sources of information to guide our decision-making, and these prominent investors can keep us updated on the latest trends,” he said.

The firm, which competes with Binance, Coinbase, FTX and among others, has been exploring opportunities in the web3 ecosystem for some time. Late last year, it launched its investment arm, KuCoin Ventures, through which it makes both strategic and financial investments.

Lyu said the venture arm’s asset under management has already ballooned to a “couple hundred million U.S. dollars.”

KuCoin has gained some popularity — as well as notoriety — for listing tokens with small to midsized market cap. One of the popular ways some savvy traders made good profits earlier was heavily making bets on the new KuCoin was about to list and selling them as soon their trading went live on the central exchange.

(Theoretically, especially during a bull cycle, retail investors stand a chance to make good profits on such tokens as well. Because their market caps are too low, compared to those listed on Coinbase and Binance, the on-paper growth upside is higher.)

Lyu said providing users with high-quality potential projects is “one of our major strategies at KuCoin and one of the reasons why we are known as ‘People’s Exchange.’”

“As you can see, KuCoin, as the home of hidden gems, not only keeps track of real-time hot sectors in the industry but also deeply researches potential projects in various sectors all the way, even if it is a small or midcap token at a certain stage,” he said. “For example, we have listed many new projects in the world premiere way no matter through the normal listing or KuCoin Spotlight, KuCoin BurningDrop, in which many projects are turned out to be very high quality and potential after a period of development. The premise of guaranteeing its huge potential and quality is that we have professional, all-around, and strict related processes.”

The firm said it has seen an increase in demand for centralized services over the years, but is committed to catering to users who also wish to avail some decentralized services.

“We noticed that some users would prefer to use DEX because it can be directly integrated with the wider crypto native ecosystem. Actually, we are exploring and developing decentralized products like the NFT marketplace — Windvane. In addition, KCC, jointly built by members of the KuCoin community and KCS fans, will also be an important aspect for KuCoin to build a decentralized ecosystem, with DEX and other protocols such as lending and stablecoins are building on it. We also have a P2P service for users who wish to convert fiat currencies to digital assets with the lowest fees and a high level of security,” he said.

The exchange is also working to step up its efforts to support global regulation requirements and is investing to enhance its security and risk management systems, it said.

“KuCoin provides a comprehensive platform of crypto services to a global audience, which is one of the many reasons we’re proud to lead this round,” said Tak Fujishima, head of Asia at Jump Crypto, in a statement. “We are pleased to support the company as it continues to grow and expand its offerings in futures and margin trading, lending, staking and passive yield generation to support the growth of web 3.0 and the crypto markets.”

Subscribe to TechCrunch’s crypto newsletter “Chain Reaction” for news, funding updates and hot takes on the wild world of web3 — and take a listen to our companion podcast!