Crypto Platform Kraken Adds Tribe Capital’s Sethi to Its Board
(Bloomberg) -- Tribe Capital co-founder and partner Arjun Sethi joined the board of cryptocurrency exchange Kraken, which has been in talks to raise fresh funding at a valuation that could surpass $20 billion.
Since December, Tribe has spent $120 million on primary and secondary equity investments, and is Kraken’s second-largest institutional investor behind Hummingbird Ventures, Sethi said in an interview.
As a non-executive director of San Francisco-based Kraken, Sethi is the company’s third board member alongside co-founder and Chief Executive Officer Jesse Powell and co-founder Thanh Luu.
“Arjun’s deep expertise in scaling fast-growing businesses and his understanding of the dynamics in the crypto market make him a valuable addition to Kraken’s board,” Powell said in an emailed statement. Tribe’s data-informed insights will help position Kraken to accelerate the global adoption of crypto globally, which is “happening at a pace never seen before.”
Founded in 2011, Kraken has more than 6 million clients in almost 190 countries who can trade over 60 digital assets and seven traditional currencies including the euro, U.S. dollar and British pound. During the first quarter, the company processed more than $160 billion in trading volume, a 58% jump on its volume for all of 2020.
About 1 million new clients have signed up in the past 30 days. Clients include family offices, hedge funds and other institutional traders, as well as sophisticated individuals and retail investors, a spokeswoman said.
Sethi said Tribe has a “rigorous quantitative approach” to customer-behavior data to identify companies that can snare a disproportionate level of market share and extend that dominance into adjacent areas. Kraken, which is already profitable, meets Tribe’s criteria as a unique and probably dominant, player, Sethi said.
The company’s user base, engagement, revenue and volumes have jumped by a multiple of about 10 since December, and its special purpose depository institution banking charter -- which facilitates the custody of digital assets -- illustrates its potential, Sethi said.
“With a focus on product, engineering and data science, our team helped with the early growth of companies including Facebook, Airbnb, Slack, Uber, and Yahoo, and are excited to help Kraken accelerate its growth,” he said. Sethi met Powell years ago through his role on the board of Digital Currency Group as a representative of his prior firm, Social Capital.
Tribe, which manages about $1.2 billion in assets under management and counts family offices and endowments among its investors, backed Kraken via its flagship funds, Sethi said.
Kraken is “well capitalized” and hasn’t ruled out bringing on additional strategic partners, a spokeswoman said, declining to comment further. Electric Capital and Tekne Capital Management LLC recently invested in the company in secondary transactions, she said.
Kraken might consider going public next year through a direct listing, the spokeswoman said. A SPAC transaction is no longer likely due to the company’s size. A final decision hasn’t been made, she said.
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