US cryptocurrency exchange Coinbase has raised fresh funds at a valuation of more than $8bn, underscoring the interest that investors have in the sector despite sharp declines in the price of many digital coins.
The California-based company said on Tuesday that it had raised an additional $300m in investment “to accelerate the adoption of cryptocurrencies and digital assets”.
The funding round was led by Tiger Global Management, with other participants including Y Combinator Continuity, Wellington Management, Andreessen Horowitz and Polychain.
“We see tremendous promise in crypto to build the next great phase of the internet,” said Asiff Hirji, chief operating officer of Coinbase, in a blog post.
The valuation of the company following the latest round would be a big jump from the last time it raised funds, having been valued at $1.6bn in the summer of 2017 after raising $100m and becoming the first cryptocurrency ‘unicorn’ start-up. Coinbase is reported to have raised about $525m from investors to date.
Coinbase is a major trading venue for cryptocurrencies, including bitcoin, the most actively traded and best known digital coin. Bitcoin has tumbled from peaks near $20,000 at the end of last year to around $6,200 on Tuesday.
Its fall has come amid tighter regulation and persistent concerns over whether mainstream investors will become more deeply involved in the market, even as existing investors in the market have racked up losses.
Coinbase said that the money would be used for global expansion and building the infrastructure between fiat and crypto in regulated markets around the world, as well as to offer more cryptocurrencies on its platform. It also said it wanted to bring more institutional funds into the market.
The exchange itself has faced controversy in recent months. In February, Coinbase suffered a flood of criticism after some users reported erroneous charges on accounts they used to purchase coins at the exchange. Visa, the payments network, and Worldpay, the transaction processor, were both caught up in the storm and later said Coinbase was not at fault.
The company had previously faced other user complaints, including from some who have said that withdrawals in various currencies, including US dollars, have been delayed.
In January it hired an ex-Twitter vice-president to bolster its customer services department, which it has said was overwhelmed by the booming demand.