Digital Investment Platform Bitpanda Surges to $4.1bn Valuation with $263m Funding

European fintech company will use the proceeds for new staff, technology and international expansion.

European digital investment platform Bitpanda raised $263 million (£190.7 million) in funding last week to take it to a mighty $4.1 billion (£3 billion) valuation. 

The fintech company will use the proceeds for new staff, technology and international expansion in France, Spain, Italy and Portugal. The Series C round was led by Valar Ventures, with the participation of British billionaire hedge fund manager Alan Howard and REDO Ventures, as well as existing investors LeadBlock Partners and Jump Capital. It’s the third time Valar has backed Bitpanda since its first major funding round, announced in September 2020. This month’s funding is more good news for Bitpanda as four months ago the firm gained unicorn status.

Bitpanda was founded in Austria in 2014 by Eric Demuth, Paul Klanschek and Christian Trummer. Along with a presence in London, it has physical tech hubs and offices in seven other cities across Europe, including Vienna, Barcelona, Berlin, Krakow, Madrid, Milan and Paris. The company has 500+ people who represent more than 50 nationalities.

Andrew McCormack, Founding Partner of Valar Ventures, says: “We believed in Bitpanda’s potential from the beginning and we are impressed by the results that Eric, Paul, Christian and the Bitpanda team have achieved. With more than 1.2 million users acquired in the first half of 2021, impressive net revenue growth and world-class executive hires, Bitpanda stands as the living proof that hypergrowth can be achieved in a sustainable way.”

Bitpanda is enjoying a good time of late. It recently announced the opening of its remote-first Blockchain Research & Development hub, and it plans to open new offices in Europe. It didn’t go into specifics about the offices but it certainly has the money to make it happen.

The firm started out as a crypto-trading company, but now sees itself as a “well-rounded” investment platform. Users can invest in commission-free fractional stocks, cryptocurrencies or precious metals, and with the option to start low at $1 (£0.72).

In total, Bitpanda has three million users and says it is on track to achieve 6x customer growth year over year, while revenues will increase sevenfold in 2021 as compared with the previous year.

In June, it made its intentions very clear in the B2B market with the unveiling of Bitpanda While Label. This opens up its digital finance infrastructure to B2B2C partners and clients. Fintechs, traditional banks and online platforms can create an investing offer of their own, with the look and feel of their brand, based on Bitpanda’s technical infrastructure. The entire Bitpanda infrastructure can be offered as a white-label product, such as crypto trading, custody or wallet services. White Label works by letting users connect their native finance or banking app to Bitpanda’s backend via a set of APIs.

Bitpanda’s Rivals 

Wherever you are in the world, someone somewhere has similar ideas.

Bitpanda has a variety of competitors who were founded in Europe. They include Revolut and eToro in London; Trade Republic and Nuri (formerly Bitwala) in Berlin; and Bitstamp in Luxembourg.

Some fintech firms can struggle to make a profit. Revolut saw its annual revenues increase from £166 million in 2019 to £261 million in 2020, but its losses have worsened. It reported a £168 million loss for last year, compared to £107 million in 2019. That said, Revolut says it was “strongly profitable” in the first quarter of 2021. Bitpanda points out that it has been profitable for the last five years.

There are also rivals to Bitpanda beyond Europe. Companies that are based in the US include Uphold, Kraken, Poloniex and Coinbase. Binance is another famous name and officially domiciled in the Cayman Islands; while CoinDCX is in India.

The Investors in Bitpanda

As $263 million funding is a substantial sum, it can be interesting to look at the investors.

Valar Ventures is a New York-based venture firm founded by Peter Thiel, James Fitzgerald and Andrew McCormack in 2010. Valar manages over $1.3 billion (£943 million) in assets under management and is known for its fintech investments including Wise (formerly TransferWise), N26, Stash, BlockFi, Xero, TaxFix, Octane and Qonto. Thiel is also co-founder of PayPal and was the first outside investor in Facebook.

LeadBlock Partners is a venture capital fund based in Europe, founded by Jean-Marc Puel, David Chreng-Messembourg and Baptiste Cota. LeadBlock invests in B2B blockchain and digital assets solutions. Its portfolio companies include Connecting Food, Direct Market and Tesseract.

Chicago-based Jump Capital specialises in early stage investments, focusing on data-driven companies across the crypto, media, fintech, application software, IT and data infrastructure sectors. A look at the portfolio on its website reveals such names as BlockFi and CoinDCX.

Howard is the founder of Brevan Howard Asset Management, but stepped down as CEO in 2019. Last year he backed One River Digital Asset Management in its purchase of more than $600 million (£435.2 million) worth of Bitcoin and Ethereum. The fund has commitments that will take its total holdings of those cryptocurrencies to about $1 billion (£725.3 million) this year.

Antony Peyton
Antony Peyton
Antony Peyton is the Editor of eWeek UK. He has 18 years' journalism and writing experience. His career has taken him to China, Japan and the UK - covering tech, fintech and business. Follow on Twitter @TonyFintech.
Get the Free Newsletter
Subscribe to Techrepublic UK for weekly updates from Techrepublic and eWEEK on the latest in UK top tech news, trends & analysis
This email address is invalid.
Get the Free Newsletter
Subscribe to Techrepublic UK for weekly updates from Techrepublic and eWEEK on the latest in UK top tech news, trends & analysis
This email address is invalid.

Popular Articles