What Coinbase’s direct listing says about today’s markets

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It’s the whale of the day.

Coinbase is going public today on the Nasdaq in a blockbuster direct listing expected to value the cryptocurrency exchange miles above its last private market price tag.

Driven in part by a frenzy in cryptocurrency trading, the largest U.S. crypto exchange has been trading at above $90 billion in private, secondary markets since being last valued at about $8 billion in 2018, per Pitchbook data. Even the more conservative reference price of $250 a share (a number that direct listings use as a starting point but historically isn’t the stock’s opening price) values the company at about $65 billion.

If those figures sound insane, that’s because they kind of… are. The company last year posted a profit of $322 million on revenue of $1.3 billion in 2020. The numbers were even more optimistic in the first quarter of 2021, with Coinbase estimating that it posted $1.8 billion in revenue and income of between $730 million to $800 million for those three months. Still, the stock is by one major measure expensive. Even with those results, a valuation of about $90 billion represented a lofty price-to-earnings ratio of over 90 times its 12-months earnings—far surpassing the multiple of traditional exchanges such as the Intercontinental Exchange (31) or the Nasdaq (27).

And that’s not even accounting for the uncertainty around Coinbase’s model. The company’s fortunes rise and fall with the ebb and flow of Bitcoin itself. Read my colleague, Shawn Tully, on why, from a mathematical standpoint, Coinbase at a potential $100 billion valuation is an improbability.

But here’s the thing about today’s markets: Much of mathematics and the art of fundamental analysis is being pushed aside in stocks such as Tesla and GameStop, where a heady combination of social media and pure belief can keep a stock aloft.

The market is partly psychology. Even if the world feels like it’s going to hell in a handbasket—as it did at the start of this pandemic—as long as investors believe things will be okay, the stock market and spending will keep chugging along. Fundamental analysis in itself offers a psychological framework too—you as an investor find what feels like certainty in the numbers of what this company could be in the future based on historical norms. But right now, in this moment of investing, more and more people are searching for signals of certainty in new places such as the hallowed halls of Reddit’s r/wallstreetbets.

As for Coinbase, I suspect many of its investors will also fall in that category of chasing a vision of what the company could be rather than basing their bets on fundamental analysis—which means the changes in its stock price may find fewer comparisons to ICE and the Nasdaq and more with, say, Tesla.

Whether or not the investors are right, and whether or not Bitcoin prices stay up, are a different story altogether. But crypto companies are certainly finding a window to go public. Bakkt agreed to go public via merger with a VPC Impact Acquisition Holdings, a SPAC, in January. Kraken is already working toward an IPO. There’s also been Gemini, whose founders have teased the idea of a public debut as well

SCALE AI: Data labelling startup Scale AI is now valued at $7.3 billion after raising $325 million in Series E funding. Dragoneer, Greenoaks Capital and Tiger Global led the round. Read more.

Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com


- Benchling, a San Francisco-based life sciences R&D cloud company, raised $200 million in Series E funding. Sequoia Capital Global Equities led the round and was joined by investors including Altimeter Capital, Byers Capital, and Elad Gil. 

- Degreed, a Pleasanton, Calif.-based maker of software for the human resource departments, raised $153 million valuing it at over $1.4 billion. Sapphire Ventures and Riverwood Capital led the round.

- HomeX, a Chicago-based home services platform, raised $90 million. New Mountain Capital led the round.

- HqO, a Boston-based operating system for commercial office buildings, raised $60 million in Series C funding. Investors included Accomplice, Insight Partners, JLL Spark, Navitas Capital, DivcoWest, Allegion Ventures, and The Pagliuca Family Office.

- Grover, a Berlin-based startup for renting consumer electronics, raised €45 million ($54 million) in Series B equity. JMS Capital-Everglen led the round and was joined by investors including Viola Fintech, Assurant Growth, coparion, Augmentum Fintech, Circularity Capital, Seedcamp and Samsung Next.

- Seeq Corporation, a Seattle-based manufacturing and Industrial Internet of Things analytics software maker, raised $50 million in Series C funding. Insight Partners led the round and was joined by investors including Altira Group, Chevron Technology Ventures, Cisco Investments, Saudi Aramco Energy Ventures, and Second Avenue Partners.

- Slice, a New York-based maker of software for pizzerias, raised $40 million in Series D funding. Cross Creek led the round and was joined by investors including KKR, GGV Capital, Primary Ventures, and 01 Advisors.

- Cohere Health, a Boston-based digital health company, raised $36 million in Series B funding. Polaris Partners led the round and was joined by investors including Longitude Capital, Deerfield Management, Flare Capital Partners, and Define Ventures

- Density, a San Francisco-based space analytics and people counting company, raised $25 million in funding from existing investors. Investors included Kleiner Perkins, 01 Advisors, Upfront Ventures, Founders Fund, Ludlow Ventures, Launch, Disruptive, LPC Ventures, Alex Rodriguez, Julia and Kevin Hartz, and Cyan and Scott Banister.

- Vericred, a New York-based data services platform with health insurance and benefits, raised $23 million in Series B funding. Aquiline Technology Growth led and was joined by investors including Echo Health Ventures, MassMutual Ventures, Guardian Strategic Ventures, Riverside Acceleration Capital, FCA Venture Partners, and First Health Capital Partners.

- Hatch, a San francisco-based fintech, raised $20 million in funding. Investors include Kleiner Perkins, Foundation Capital, and SVB.

- Itential, an Atlanta-based network and cloud automation startup, raised $20 million in Series B funding. Elsewhere Partners led the round.

- Virtualitics, a Pasadena, Cauliflower-based data analytics software company, raised $18 million in Series B funding. North Sound Ventures led the round.

- Meroxa, a San Francisco-based maker of a data pipeline platform, raised $15 million in Series A funding. Drive Capital led the round and was joined by investors including Root, Amplify, and Hustle Fund.

- ImmunoScape, a Singapore and San Diego, Calif.-based biotech company providing insights into the human immune system, raised $14 million. Anzu Partners, University of Tokyo Edge Capital Partners, and EDBI led the round.

- Legacy, a Boston-based digital fertility clinic for men, raised $10 million in Series A funding. FirstMark Capital led the round and was joined by investors including Bain Capital Ventures, Section 32, Y Combinator, TQ Ventures, and Tribe Capital. 

- DoControl, a New York-based automated data access controls platform, raised $10 million in Series A funding. RTP Global led the round.

- Tagger Media, a Los Angeles-based platform for global brands and agencies to find influencers and measure engagement, raised $8.5 million in Series A funding. Five Elms Capital led the round.

- Wage, a San Francisco-based payroll data sharing company, raised $5 million in funding. Gradient Ventures led the round and was joined by investors including 8VC, Pear Ventures, Bloomberg Beta, and CoFound Partners.

- Enso Finance, a Zurich-based social trading platform for decentralized finance, raised $5 million. Polychain Capital and Beacon led the round.

- Bandwango, a Murray, Ut.-based travel startup, raised $3.1 million in seed funding. Next Frontier Capital led the round and was joined by investors including Kickstart, Signal Peak Ventures, SaaS Ventures, and Ocean Azul Partners

- Nestwave, a Paris-based provider of geolocation IP and cloud services for Internet of Things applications, raised €2.4 million ($2.9 million). European Innovation Council, the European Commission's  venture capital fund, invested.

- Credflow, an India-based cash flow management solution, raised $2.1 Million (Rs 15.2 crore) in seed funding. Stellaris Venture Partners, Flourish Ventures, and Omidyar Network India led the round.

- Anari AI, a San Francisco-based A.I. chip factory in the cloud, raised $2 million in seed funding. Earlybird led the round and was joined by investors including Acequia Capital, Serbian Entrepreneurs, and Eric Ries.

- Wyng, a New York-based provider of zero-party data software, raised $2 million from existing investors including Edison Partners and Windcrest Partners


- Bregal Sagemount invested $100 million in Scorpion, a Salt Lake City, Ut.-based provider of technology and services for local businesses. Financial terms weren't disclosed.

- Berkshire Partners invested $50 million in UPSTACK, a New York-based cloud and internet infrastructure solution company.

- A&R Logistics, backed by Wind Point Partners, acquired Luckey Trucking, a Streator, Ill.-based provider of transportation and logistics to the chemical industry. Financial terms weren't disclosed.

- Incline Equity Partners invested in Revival Animal Health, an Orange City, Ia.-based  provider of pet health products. Financial terms weren't disclosed.

- Gridiron Capital acquired Class Valuation, a Troy, Mich.-based provider of appraisals to mortgage lenders and originators. Financial terms weren't disclosed.

- Hellman & Friedman agreed to acquire Enervus, an Austin-based energy data analytics and SaaS technology company. Financial terms weren't disclosed.

- Rainier Partners acquired Calpine Containers, a Clovis, Calif.-based packaging distributor serving the - agriculture industry. Financial terms weren't disclosed.

- RGI, a portfolio company of Corsair Capital, acquired FLEXPERTO, a German provider for digital business to consumer communication and collaboration tools. Financial terms weren't disclosed.

- Material, backed by Tailwind Capital, acquired Aruliden, a New York-based design agency. Financial terms weren't disclosed.

- Waud Capital acquired TeamSnap, a Boulder, Colo.-based sports management and communication software for amateur sports. Financial terms weren't disclosed.

- WindRose Health Investors recapitalized Bluestone Physician Services, a provider of care to chronically ill patients residing in senior living, community, and other home-based settings. Financial terms weren't disclosed.


- KKR is nearing a deal to acquire Ensono, an IT tech company, from Charlesbank Capital Partners and M/C Partners for around $1.7 billion, including debt, per Reuters.

- Pine Labs acquired Fave, a Singapore-based e-commerce business, for $45 million. Sequoia Capital India and 500 Startups are among Fave’s investors.

- Blackstone agreed to acquire Sabre Industries, an Alvarado, Tx.-based utility infrastructure company, from The Jordan Company. Financial terms weren't disclosed.

- Ÿnsect acquired Protifarm, a Netherlands-based mealworm startup. Oost NL backed Protifarm. Financial terms weren't disclosed.

- 1Password acquired SecretHub, a Netherlands-based maker of encryption software. Financial terms weren't disclosed.


- Public Storage (NYSE:PSA) agreed to acquire ezStorage, a Columbia, Md.-based storage rival, for $1.8 billion.

- Univision will merge with Grupo Televisa’s content and media assets worth about $4.8 billion. The deal creates a Spanish language multi-media company. SoftBank will back the entity known as Televisa-Univision.


- TaskUs, a New Braunfels, Tx.-based provider of outsourcing services, filed to raise $100 million. Blackstone led the round.


- Babylon, a U.K.-based maker of an app for connecting patients and doctors, is in talks to go public via merger with Alkuri Global Acquisition, a SPAC, per Bloomberg. A deal could value it at between $3 billion to $4 billion.


- UTA Ventures, a Los Angeles-based venture firm for the talent agency, named Clinton Foy as general partner.


- CenterOak Partners, a Dallas-based private equity firm, closed CenterOak Equity Fund II with $690 million.

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