IPO — Startup Cryptocurrency Exchange Bakkt to Go Public

By Avi Ben Ezra Tuesday, January 12, 2021

Cryptocurrency trading exchange Bakkt, which is owned by the Intercontinental Exchange (ICE) and operates the New York Stock Exchange (NYSE), will be going public. The startup company announced its upcoming initial public offering (IPO) on Monday and might become the first digital asset platform to go public.

Riding the Cryptocurrency Wave

It’s not surprising that different crypto-related companies are deciding to go public now. The world’s top cryptocurrency, Bitcoin, broke above the $40,000 mark for the first time this week.

Recently, the startup appointed a new CEO, Gavin Michael, who is the former chief technology officer of Citi’s Global Consumer Bank. Before Citi, he was the chief technology innovation officer at Accenture.

“The average consumer holds a wealth of digital assets but rarely tracks their value and lacks the tools to manage and utilize them. I’m excited to join the management team of a company, at this important time in its expansion, whose vision is to bring trust and transparency to digital assets through innovation and technology and, through that process, unlock trillions of dollars currently held in customer and loyalty accounts and allow consumers to put them to work,” said Michael.

The startup is also launching its Bakkt App on Google Play and App Store. More than 400,000 customers applied for early access, while their app is expected to launch in March this year. The Bakkt App brings many features, including cryptocurrency trading, digital wallet, loyalty redemption, and more.

Rather than going with a traditional IPO, Bakkt opted for a popular special purpose acquisition company (SPAC) IPO. This model involves purchasing a private company. Following the acquisition, the combined company becomes publicly traded. The merger values the combined company at $2.1 million.

The process involves the SPAC going public to secure funds. After that, the SPAC has two years to use the raised funds to buy the company. In this case, VPC Impact Acquisition Holdings (VIH) is the SPAC acquiring Bakkt. VIH is the affiliate of the global investment firm Victory Park Capital (VPC).

“With VPC Impact Acquisition Holdings, our aim was to identify a high-growth fintech company with competitive differentiation and significant white space, and we are pleased to have found a great match in Bakkt,” said John Martin, chief executive of VPC Impact Acquisition.

Coinbase, one of the world’s largest cryptocurrency exchanges, also filed for an IPO in December.

Summary

Startup crypto asset marketplace Bakkt is planning to go public through a SPAC IPO. Bakkt might become the first cryptocurrency exchange platform to go public, although its competitor Coinbase also filed for an IPO.

About the Author


Headshot for author Avi Ben Ezra

Avi Ben Ezra is the Chief Technology Officer (CTO) and Cofounder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.

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