Ballyhooed Crypto Venture Bakkt Shows Limited Growth Three Years Later
(Bloomberg) -- Three years after a much-touted debut that included partnerships with mega-brands such as Starbucks and Microsoft, the digital-asset marketplace Bakkt Holdings Inc. is showing incremental progress toward its goal of connecting the digital economy.
The platform, which is majority owned by Intercontinental Exchange Inc., reported results Friday for the first time as a public company. Investors appeared to be disappointed, with the shares tumbling 7.8% as of 3:27 a.m. in New York. The stock is up over 150% since Bakkt completed a SPAC merger in October.
The Alpharetta, Georgia-based company initially focused on developing Bitcoin futures contracts and a custodial service for institutional investors when it was founded in 2018. It seeks now to enable consumers, businesses and institutions to buy, sell, spend, send and redeem digital assets. Bakkt had more than 1.7 million transacting accounts year-to-date. In investor presentations at the start of the year, the company projected roughly 9 million active users by the end of 2021.
Bakkt’s net loss widened to nearly $30 million in the third quarter, due in part to higher expenses related to an increase in marketing expenses to attract users as well as new partners. Revenue jumped 38% to $9.1 million.
“The flexibility of our offerings is the key, differentiator of our go-to-market strategy,” Bakkt Chief Executive Officer Gavin Michael said during a conference call Friday.
Between its recent Mastercard partnership that will look into the “fungibility” between loyalty points, crypto and other digital assets as well and adding Choice Hotels to its platform, Bakkt appears to be charting a path that doesn’t necessarily rely solely on crypto transactions.
Bakkt listed on U.S. exchanges after merging with SPAC VPC Impact Acquisition Holdings in mid-October and received gross proceeds of roughly $450 million, earmarked to expand its platform, for marketing and building on partnerships.
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