Over 6,000 times profit! Which investment institutions made a fortune from Coinbase's IPO?

Text | Nancy Editor | Tong Producer | PANews

As the first crypto trading platform to test the waters in the US public market, Coinbase is gaining popularity. In addition to being on the Weibo hot search list, the number of Coinbase App downloads has also risen sharply, and has now climbed to No. 9 on the US App Store rankings.

According to Snowball data, as of the close of April 15, Coinbase's stock price was $322.75, down 1.68%. Although Coinbase's stock price performance is not very impressive, and the direct listing model has also contributed to the volatility of the stock price, the outside world's optimism about the "first crypto stock" is gradually forming. For example, three ETFs under Cathie Wood, the "female version of Buffett" and founder and CEO of Ark Invest, bought 750,000 shares of Coinbase worth $240 million on the first day of listing. At the same time, BTIG analyst Mark Palmer also gave Coinbase an initial rating of buy, with a target price of $500.

From a fledgling to a veritable industry unicorn, Coinbase's transformation into a "thousand-mile horse" is inseparable from the "Bo Le". Since its establishment in 2012, Coinbase has raised more than 547 million US dollars in total. After its listing, Coinbase has also made these equity investors who adhere to long-termism "forced to get rich".

Based on the current closing price, Coinbase's current market value is $64.29 billion. If the number of shares after full dilution (including options and restricted employee stock ownership) is 261.3 million shares, Coinbase's total valuation is $84.33 billion. Compared with the valuation of $8 billion in private equity financing more than two years ago, Coinbase's market value has increased by more than 10 times; and compared with the initial angel round, it has increased by thousands of times.

What is more worth mentioning is that since Coinbase adopted a direct listing model, these early investors can directly sell their shares.

Source: CNBC

Angel round: thousands of times

Coinbase's first round of financing was thanks to its 11-page PPT at the Y Combinator roadshow. In September 2012, Coinbase completed a $600,000 seed round, in which Y Combinator was among the investors, and other investors included FundersClub, Hard Yaka, IDG Capital, Garry Tan, Reddit co-founder Alexis Ohanian and Invemax.

According to IDG Capital, one of the angel investors, it is expected to get a return of thousands of times. At the same time, Garry Tan, a well-known angel investor and founder of Initialized Capital, also revealed that the $300,000 he invested in the angel round is now worth $2 billion after Coinbase went public, an increase of more than 6,000 times. In addition to the angel round, Initialized Capital also participated in Coinbase's C and E rounds of financing.

Round A: 4216 times

In May 2013, Coinbase received a $5 million Series A financing led by Union Square Venture, with participation from Ribbit Capital, SV Angel, Red Swan Ventures, Funders Club, Bobby Goodlatte, Interplay Ventures, Jonathan Golden, Digital Currency Group and other investors. Coinbase also became the first crypto project to complete Series A financing. In this round of financing, the price per share was 20 cents, and Coinbase was valued at approximately $20 million, with a return rate of 4,216 times to date.

According to SEC filings, Union Square Ventures owns 13,902,324 Class B shares of Coinbase, and its partner Fred Wilson also owns 13,902,324 Class B shares, currently valued at over $8.95 billion. It is worth mentioning that Fred Wilson, an early supporter of Bitcoin, is also a member of the Coinbase board of directors, and he was already a Coinbase user before becoming a Coinbase shareholder.

Round B: 590 times

In December 2013, Coinbase completed a $25 million Series B financing led by Andreessen Horowitz (A16Z), with other investors including Union Square Ventures, QueensBridge Venture Partners, Emagen Investment Group, Inc. and well-known investor Daniel Gross. During the B round of financing, Coinbase's share price was $1 and its valuation was approximately $143 million, which means that the return rate of investors in the B round was nearly 590 times.

Among them, A16Z can be regarded as the largest external investor. As of 2020, A16Z has participated in 8 rounds of investment in Coinbase and has been continuously increasing its holdings in Coinbase. For example, SEC filings show that in October 2019, A16Z purchased $57.1 million worth of shares from Union Square Ventures at $23 per share; in 2020, A16Z purchased $30 million worth of Coinbase shares from Union Square Ventures at $28.83 per share.

In addition, for example, the founder of QueensBridge Venture Partners, American rapper Nas, may also make a net profit of $100 million from Coinbase's listing. Based on QueensBridge Venture Partners' previous investment of $100,000 to $500,000, he may hold 99,329 to 496,642 shares, with a value of $32 million to $160 million after listing.

Round C: 168 times

In July 2015, Coinbase completed a $75 million Series C financing round, with investors including DFJ Growth, Andreessen Horowitz, Union Square Ventures, Ribbit Capital, New York Stock Exchange, USAA, Initialized Capital, Spanish Foreign Exchange Bank BBVA, Vayner/RSE, former Citigroup CEO Valar Capital, former Thomson Reuters CEO Vikram Pandit, Kindred Ventures, DoCoMo, Boost VC, angel investor Bobby Goodlatte, Blockchain Capital, Fueled, Reinventure Group and Propel Venture Partners, etc. In the Series C financing round, Coinbase's share price was $2.76, with a valuation of approximately $500 million. So far, the return rate for investors has been nearly 168 times.

Among them, Ribbit Capital is the third largest external investor in Coinbase. SEC filings show that Ribbit Capital holds 11,995,949 Class B shares, currently valued at $3.82 billion.

Round D: 53x

In July 2017, Coinbase completed a $100 million Series D financing led by IVP, with participation from Spark Capital, Greylock Partners, Battery Ventures, Section 32, Draper Associates, Balyasny Asset Management, Tusk Ventures, Angels, Expanding Capital, Kindred Ventures, Shanti Bergel and Thirty Five Ventures. At the time of the Series D financing, Coinbase's share price was $8.25, with a valuation of $1.6 billion. So far, the return rate on investors has been nearly 53 times.

NBA star Kevin Durant and his business partner Rich Kleiman also invested in Coinbase in this round of financing. When Coinbase went public with a valuation of $100 billion, Durant received a 61.5 times return on this investment. Kevin Durant is actually a very good investor. In the past five years, he has invested in more than 50 companies, one of which is an online e-commerce platform and a food delivery platform, which has made Kevin Durant profit more than $40 million.

Round E: 11x

In November 2018, Coinbase completed a $300 million Series E financing led by Tiger Global Management, with participation from Andreessen Horowitz, Y Combinator, Wellington Management Company, Polychain, Initialized Capital, Kingsley Advani, Manhattan Venture Partners, etc. At the time of the Series E financing, Coinbase's share price was $36.19, with a valuation of $8 billion. So far, the return rate on investors has been nearly 11 times.

Among them, Marc Andreessen, a director of the Coinbase board, is also a participant in the E round of financing. According to the filing regulatory documents of the U.S. Securities and Exchange Commission (SEC), Andreessen Horowitz owns 5,516,037 Class A shares and 23,961,498 Class B shares, even more than Brian Armstrong, the founder and CEO of Coinbase.

Tiger Global Management, as the lead investor in this round of financing for Coinbase, currently holds 624,880 Class A shares of Coinbase, worth more than US$840 million, according to SEC filings.

Secondary market: about 10 times

In December 2018, Coinbase also received $22 million in financing from Manhattan Venture Partners, Fundamental Labs, True Capital Management and Chainfund Capital through the secondary market. According to people familiar with the matter, the return rate of this round of financing is about 10 times.