Japanese SBI Investment to Lead Kraken’s Series B Funding Round
Kraken, one of the major bitcoin exchanges in the world, has reached an agreement with Japan's SBI Investment to invest in and lead the startup's Series B funding round.
Exact terms of the deal have not been disclosed although Kraken did mention a "multi-million dollar agreement."
SBI Investment's backing of Kraken comes shortly after SBI Holdings, the financial services division of SBI Group, announced the formation of a new company in collaboration with Ripple. The company, called SBI Ripple Asia, aims to focus on expanding the use of Ripple products and services to Asian markets including China, Korea, Japan and Taiwan.
SBI Group started expressing interest in Bitcoin and blockchain technology in December last year when it was unveiled that SBI Sumishin Net Bank, a joint venture between Sumitomo Mitsui Trust Bank and the group, was developing a proof-of-concept in collaboration with Nomura Research Institute aimed at exploring "ways to apply [blockchain technology] to the banking industry."
Commenting on the agreement between Kraken and his company, Yoshitaka Kitao, CEO at SBI Holdings, said in a statement:
"We knew that we wanted to invest in Bitcoin and the blockchain. We wanted a company that would be a wise strategic investment. ... Kraken was the clear choice."
The agreement with SBI Investment, the venture capital arm of SBI Group, comes amid Kraken's expansion into North America markets.
Kraken, which has been busy developing market share outside the US for strategic and compliance reasons, announced two weeks ago the acquisition of New York-based Coinsetter and Canada's first bitcoin exchange Cavirtex.
The acquisition, the largest merger and acquisition deal in the bitcoin space to day, marked the company's debut in the American and Canadian markets.
As of Japan, Kraken has been active in the domestic bitcoin space for several years. In 2014, along with becoming the first major bitcoin exchange to offer bitcoin/JPY trading, Kraken helped Japanese parliament member Mineyuki Fukuda and the IT Committee of the ruling Liberal Democratic Party (LDP) in establishing the Japan Authority of Digital Assets (JADA). JADA is a self-regulating organization of bitcoin businesses that aims to regulate the bitcoin industry.
Kraken was selected that same year by the Tokyo's court appointed trustee to assist creditors of MtGox in the investigation of missing bitcoins, in filing claims, and in distributing remaining assets. As of September 2015, 202,159 bitcoins and US$11,474,707 were expected to be disbursed to approximately 25,000 creditors.
"SBI’s investment means a lot to us. We’re proud to have such a strong strategic partner leading our round," Jesse Powell, CEO of Kraken, said.
"It’s a fantastic first step toward completing Series B, which will ultimately enable us to scale our business worldwide. Kraken will be prepared to meet the fast-increasing demands of an emerging ecosystem of blockchain-enabled assets."