Bitpanda, a “neobroker” that wants to make it easier for ordinary people to invest not just in bitcoin and other digital assets, but also gold, and any established stock that takes their interest, has picked up $170 million, a Series B that catapults the company’s valuation to $1.2 billion. Bitpanda is based in Vienna, Austria and says that this equity round makes it the country’s first “unicorn” the first startup to pass the $1 billion valuation mark.
“We are shifting to become a pan-investment platform, not just a crypto broker,” said Eric Demuth, the CEO of Bitpanda who co-founded it with Paul Klanschek and Christian Trummer. Bitpanda’s focus up to now has been primarily on building a platform to target investors in Europe, a largely untapped market, as it happens. “In the EU, we probably have less than 10% of the population owning stocks. Our growth goes hand in hand with that.”
In addition to Austria, Bitpanda is live in France, Spain, Turkey, Italy and Poland with plans to expand to more markets this year, building hubs in Madrid, Barcelona, London, Paris and Berlin. New investment options to back ETFs and “fractional” trades, which will let people invest small amounts of money in whichever stocks they would like to back, are due to be added in April, the company says.
That said, the vast majority of activity on the platform right now is related to cryptocurrency, and within that Bitcoin trading far outweighs any other digital currency.
The round is being led by Valar Ventures the fund backed by Peter Thiel with participation also from unnamed partners from DST Global (Yuri Milner’s fund). Both have been building name for themselves as significant backers of crypto startups. Valar is also an investor in Robinhood which, like Bitpanda, has positioned itself as a platform to help a wider funnel of people engage and profit from trading and most recently, earlier this month the pair co-invested in a $350 million round for BlockFi, which provides financial services like loans to crypto traders.
While DST is a new investor in Bitpanda, Valar also led a round for Bitpanda just six months ago a $52 million Series A. Since then, Demuth and Klanschek say that the company has seen growth skyrocket (not unlike the price of bitcoin itself).
KPIs like revenue and customer numbers “have been roughly 10x,” Klanschek said, with the platform adding some 700,000 users between then and now.
“Very soon we will cross the €100 million revenue mark for the first few months of this year” said Klanschek. Annualized it will work out to around €300-400 million, he added. While the bulk of its trading is for individuals, it’s not only focused on single investors. In September, on the company’s trading volume for its “Pro” tier for companies, daily trading on the platform was $2 million. Now, it is over $25 million.
Bitpanda’s growth and enthusiasm taps into a much bigger trend in the world of trading. One of the byproducts of the Covid-19 pandemic has been consumers becoming more engaged in their own personal finance.
With interest rates down, professional futures less certain for some, a plethora of apps out there to do more with your money, a whole new set of investing classes thanks to cryptocurrency, and (last but not least) the juggernaut that is social media to help concepts go viral, people are dabbling in a wider range of activities, some having never done more than simply keep their money in a bank account before, and shuffling off a bit of money to their 401k’s or other pension funds.
Bitpanda made a decision last year to start to get more aggressive in its own fundraising to ride that wave.
“We are profitable, and we have been for four years, but in September we changed strategy and wanted to become ‘the’ investment platform for all of Europe,” Demuth said. “We needed more partners and more capital to get more top talent and this is why we did the Series A last year. Then over the past two months, we talked to our investors and said what do you think, it seems like there is some momentum. They said ‘we are in.” No roadshow needed, we will help you. We will call our contacts and they’ll join, too.”