Mercado Bitcoin Raises $200M from SoftBank - Brazil's First Crypto Exchange

Mercado Bitcoin Secures $200 Million in Series B Funding

Mercado Bitcoin, a prominent digital asset exchange operating throughout Latin America, has successfully completed a Series B funding round, raising $200 million. The investment was led by the SoftBank Latin America Fund.

Valuation and Ranking

This funding round establishes a valuation of $2.1 billion for 2TM Group, the parent company of Mercado Bitcoin. This positions 2TM Group among the top 10 unicorn companies in the Latin American market.

Recent Funding History

The current investment follows a Series A funding round secured by São Paulo-based Mercado Bitcoin in January 2021. That earlier round, of an undisclosed value, was jointly led by G2D/GP Investments and Parallax Ventures, with additional participation from HS Investimentos, Gear Ventures, Évora, Genial, JPMorgan, and DealMaker.

Significant Growth in Customer Base and Trading Volume

Mercado Bitcoin experienced substantial growth in the first half of 2021. Approximately 700,000 new customers joined the platform between January and May, increasing the total customer base to 2.8 million.

This figure represents over 70% of the total individual investor base on the Brazilian stock exchange. Furthermore, trading volume surged to $5 billion during the first five months of the year.

This represents a volume exceeding the total trading activity of the company’s first seven years combined, and is 11 times greater than the volume recorded during the same period in 2020.

Company Background and Founding

Established in 2013 by brothers Gustavo and Mauricio Chamati, Mercado Bitcoin was the first cryptocurrency exchange to launch in Brazil.

The company has maintained profitability since 2018 and, until January 2021, operated on a bootstrapped model, reinvesting generated revenue into growth and expansion.

CEO Commentary on Growth and Position

According to CEO and 2TM Group Executive Chairman Roberto Dagnoni, this approach is relatively uncommon within the fintech sector.

He described Mercado Bitcoin as “the crown jewel” of 2TM Group, highlighting its ability to achieve over 100% year-over-year growth while maintaining a positive bottom line.

2TM Group’s Diverse Portfolio

The 2TM Group encompasses several other ventures, including:

• Meubank: A multi-asset wallet and account service awaiting approval from the Brazilian Central Bank.
• Bitrust: A qualified digital custodian.
• Clearbook: An equity crowdfunding platform.

Pioneering Tokenization Efforts

In 2019, 2TM Group became the first organization globally to tokenize public debt assets. Subsequently, in 2020, the company launched Futecoin, the world’s inaugural digital asset linked to FIFA’s solidarity mechanism.

The company has also engaged in the tokenization of private debt, carbon credits, and various utility and DeFi tokens.

Future Plans and Investment Allocation

This year, Bitrust is set to introduce the first Latin America-based Digital Custody service. The Series B funding will support ongoing innovation and expansion efforts.

While the specific amount of the Series A round remains undisclosed, Dagnoni stated it enabled approximately $40 million in investment towards expanding operations within Brazil this year.

Employee Growth and Expansion

Currently, Mercado Bitcoin employs around 500 individuals, a significant increase from approximately 200 a year ago. The company anticipates reaching a headcount of approximately 700 by the end of the year.

The new capital will be allocated towards expanding service offerings, investing in infrastructure to accommodate increasing demand, acquiring new customers, and adding new product listings.

Expansion into other Latin American countries, including Mexico, Argentina, Colombia, and Chile, is planned through a combination of mergers and acquisitions, and establishing new operations.

Drivers of Growth

Dagnoni attributes the company’s growth to several factors, including the increasing global recognition of the innovative and value-preserving qualities of digital assets and cryptocurrencies.

Brazil’s historically low interest rates have also contributed to the growth of the alternative assets industry, benefiting cryptocurrency adoption.

Furthermore, the concentrated nature of Brazil’s financial services sector has created opportunities for fintech companies like Mercado Bitcoin.

SoftBank’s Perspective

Paulo Passoni, managing partner at SoftBank’s SBLA Advisers Corp, described Mercado Bitcoin as a “regional leader in the crypto space” with access to a substantial local and regional market.

He emphasized SoftBank’s commitment to investing in entrepreneurs who disrupt industries through technology, highlighting Mercado Bitcoin’s role in this regard.

SoftBank’s Continued Investment in Latin America

This investment in Mercado Bitcoin is part of a broader trend of increased activity by SoftBank in Latin America. In June, SoftBank announced an investment of “up to $150 million” in Grupo Bursátil Mexicano (GBM), a long-standing investment platform in the Mexican stock market.