Crypto wealth management startup Abra raises $55 million in heat of digital asset boom
Crypto wealth management startup Abra has raised $55 million to help fund a global expansion of its business.
Led by Ignia and Blockchain Capital, the new funding will enable Abra to grow its business internationally, create new products, and add to its sales and marketing teams, according to the company. Other investors who participated in the round include Kingsway Capital, AmEx Ventures, and CMT Digital Ventures. Abra did not disclose its valuation, but said in total it has raised more than $85 million since 2014.
“The crypto space is just getting started,” CEO Bill Barhydt said in an interview. “It’s the fastest growing technology in history—faster than the Internet itself, faster than smartphones. And I don’t see it slowing down.”
Founded seven years ago, Abra operates today in an entirely different marketplace than it did at its creation—when Bitcoin cost less than $1,000 (versus its current price of more than $47,000); the name of its creator, Satoshi Nakamoto, had yet to become well known; and Gary Gensler, the current top U.S. securities regulator, had just departed from the Commodity Futures Trading Commission.
Abra now finds itself caught in a race with other crypto giants to develop an all-encompassing set of products that can help digital asset novices and millionaires alike manage their money. The company offers its customers, who can have as little as $5 in their accounts, the ability to buy and sell more than 100 different cryptocurrencies. Users can also borrow against their crypto holdings through Abra, and even earn as much as 8% interest on them.
Over the course of the pandemic, with the crypto market’s voracious expansion, Abra’s business has exploded.
Revenues have jumped more than 10-fold over the past year; assets under management within its custody services businesses have reached $1 billion; and Abra today boasts 155,000 monthly customers, according to the company.
Now, Barhydt, who was among some of the first employees at early dotcom superstar Netscape, has already begun looking to what’s next: a public listing.
When and how Abra could enter the public markets is not certain yet, but Barhydt said that a listing has become “very attractive.” He expects the company to have the structures to go public (like a finance team) in place at some point next year. The U.S. public markets have indeed been more than welcoming throughout 2021, with the number of initial public offerings widely expected to reach record levels by year-end. But Barhydt sees publicly traded crypto companies as the future, considering the enhanced transparency and disclosure the structure inherently creates.
“The long-term viable players here will be public companies,” Barhydt said. “I’m quite confident that Abra will be a public company sooner rather than later.”
It’s likely to be a crowded trip to the public markets, though.
Following the Nasdaq debut of Coinbase earlier this year, hordes of crypto companies have moved to go public or expressed an interest in doing so. Bakkt and eToro are set to begin trading as soon as their blank-check company deals close. Kraken CEO Jesse Powell has said his crypto exchange may go public in 2022. And Blockchain.com, BlockFi, and Gemini are all said to be considering listings as well.
Cryptocurrencies and blockchain technology are facing new pressures, too, particularly from the U.S. Securities and Exchange Commission. Gensler, the SEC’s chair, has called crypto the “Wild West.”
Abra has had a run-in with the regulator already. In 2020, the company settled with the SEC over allegations that it improperly sold contracts providing “synthetic exposure” to U.S.-listed stocks and exchange-traded funds without the proper registration. Abra, along with a related Philippines company also charged, neither admitted to nor denied the findings, but agreed to a cease-and-desist order and to pay a combined penalty of $150,000.
For Barhydt, the SEC’s intensified focus on crypto is creating “oodles of confusion” as the market looks for a clearer road map on what is or isn’t a security. But the Abra CEO also pushes back on the notion that the digital assets world isn’t regulated.
“To say that it’s a Wild West or not regulated is just untrue,” Barhydt said. “But that doesn’t mean we can’t have clarity.”
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