The American subsidiary of Binance, Binance U.S., has reported that it closed its inaugural funding round after months of seeking it. According to the press release, the firm raised over $200 million in a seed round at a pre-money valuation of $4.5 billion.
The firm was able to do so through participation from these firms; RRE Ventures, Foundation Capital, Original Capital, VanEck, Circle Ventures, Gaingels and Gold House. It was reported that there was no lead investor for the round.
The round comes seven months after Binance CEO Changpeng Zhao said in August that his U.S. arm had expected to close funding shortly from “reputable investors.” At the time, the then CEO of Binance US, Brian Brooks, left the exchange just after three months of joining, reportedly after a failed $100 million funding effort.
What you should know
- Binance U.S. aims to use the funds raised to offer new products and services to its U.S. clients. A Binance U.S. spokesperson declined to comment on what the new products are but said the exchange is exploring a host of new services organically or through strategic mergers and acquisitions. It expects to bring some of these services to market in the near term.
- Binance.US currently offers crypto spot trading services to retail and institutional clients. The exchange was launched in 2019 and is now available in 45 US states and eight territories. It plans to offer its services across all U.S. states and territories.
- Although the global exchange is leading in terms of volume of transactions according to CoinMarketCap, its U.S. arm is far behind its rival Coinbase. The exchange had a trading volume of over $9 billion last month compared to Coinbase’s over $81 billion, according to The Block’s Data Dashboard.
- Other top US-based exchanges, FTX.US and Gemini, had trading volumes of over $5 billion and nearly $4 billion, respectively, in March.
- After Brooks left, Binance U.S. promoted its president and board member Brian Shroder as CEO in October. Since then, the exchange claims, it has doubled its headcount. The current headcount of Binance U.S. is over 350 and it expects to continue hiring for various roles, including marketing, compliance and risk, customer support, product and tech, said the spokesperson.
- It was also revealed that Binance U.S. also plans to raise more funds in the coming months. The exchange is also looking to go public “in the next two to three years,” said the spokesperson.
Crypto fundraising has been thriving in recent months. Several exchanges have recently raised mega-rounds, including Gemini and FTX.US. Both exchanges are valued higher than Binance.US. Gemini raised $400 million in its first round at a $7.1 billion valuation and FTX.US also raised $400 million in its first round at an $8 billion valuation.
Binance U.S. is reportedly under investigation by the Securities and Exchange Commission over its relationship with two firms, Sigma Chain AG and Merit Peak, both owned CZ. The two firms are said to be trading crypto on Binance.US as market makers, profiting from the differences in bid and ask prices. Zhao is reportedly the majority owner of both Binance and Binance U.S.