Amber Group Raises $100M at $1B Valuation

Growing Venture Capital Interest in Cryptocurrency

A growing number of established venture capital firms are now investing in the cryptocurrency sector, acknowledging bitcoin as a viable asset for investment, even following recent significant price declines experienced by several prominent cryptocurrencies.

Amber Group Secures $100 Million in Series B Funding

Amber Group, a cryptocurrency trading startup headquartered in Hong Kong, announced on Monday the successful completion of a $100 million Series B funding round. This round establishes a pre-money valuation of $1 billion for the company.

This latest valuation represents a tenfold increase compared to the company’s Series A funding, which closed in 2019 at $28 million and included Coinbase Ventures as an investor.

Notable Investors in Amber Group’s Series B

Amber’s Series B financing was led by China Renaissance and included participation from a diverse group of prominent financial and venture capital firms. These include Tiger Brokers, Tiger Global Management, Arena Holdings, Tru Arrow Partners, Sky9 Capital, DCM Ventures, and Gobi Partners.

Benefits of Diverse Investor Perspectives

“The new investors bring a valuable range of experience, having observed numerous high-growth companies navigate the challenges of rapidly evolving industries,” stated Michael Wu, Amber’s co-founder and CEO, in an interview with TechCrunch.

“From a talent acquisition standpoint, we aim to attract top global professionals, some of whom may be new to the crypto space. Seeing well-known, traditional firms supporting Amber increases their interest in potentially joining our team.”

Continued Support from Existing Investors

Pantera Capital, Coinbase Ventures, and Blockchain.com, all previous investors in Amber Group, also participated in this new funding round.

Similar Investment Trends in the Crypto Space

In May, Babel Finance, another Hong Kong-based crypto asset manager, successfully raised $40 million in funding from several major institutional investors, including Tiger Global, which also invested in Amber Group.

Amber Group’s Evolution and Services

Founded by former investment bankers in their twenties, Amber Group initially focused on applying machine learning algorithms to quantitative trading. However, the company shifted its focus to cryptocurrency in 2017 after observing substantial increases in virtual currency trading volumes.

Currently, Amber Group provides a range of services to both institutional and individual investors, including algorithmic trading, electronic market-making, high-frequency trading, OTC trading, borrowing and lending, and derivatives trading.

Expansion to Retail Consumers

The company launched its mobile application in the third quarter of 2020, extending its services beyond institutional clients to include retail consumers. While over 700 institutional clients – primarily hedge funds, family offices, and corporations – generate over 70% of its revenue, the consumer app has experienced significant growth, reaching over 100,000 registered users.

Profitability and Revenue Growth

According to Wu, Amber Group has been profitable since its inception, achieving annualized revenues of $500 million based on data from January to April 2021.

Resilience to Market Fluctuations

Despite the recent downturn in cryptocurrency prices, the company’s business has remained strong. Wu reported that second-quarter revenues reached an all-time high, tripling those of the first quarter.

Assets Under Management and Trading Volumes

“Although price declines have reduced our assets under management (AUM) when measured in dollar terms, the number of coins held – BTC, ETH, and stablecoins – continues to grow steadily. Furthermore, our trading business is thriving due to increased market volatility.”

Amber Group currently handles 2-3% of total trading volumes in major spot and derivative markets. Cumulative trading volumes have doubled from $250 billion at the beginning of the year to over $500 billion. The company manages approximately $1.5 billion in trading capital, fluctuating with BTC and ETH prices.

Global Expansion and Future Plans

The firm now employs over 330 people globally, with offices in Hong Kong, Taipei, Seoul, and Vancouver. The Series B funding will be used to aggressively expand hiring across all departments, including quantitative research, software development, compliance, and business development.

Amber Group also intends to invest in marketing and distribution channels to acquire new users and address regulatory challenges in various jurisdictions.

Addressing Environmental Concerns

Regarding concerns about the environmental impact of the crypto industry, Wu stated that “Amber is not currently involved in proof-of-work mining.” He also expressed optimism about the future of the industry.

“Available data indicates that over 40% of bitcoin mining is already powered by renewable resources. Based on trends observed among our mining clients and partners, we anticipate this percentage will continue to increase.”

This article has been updated with additional quotes from the founder.