NeoBroker Bitpanda Raises $170M at $1.2B Valuation

Bitpanda Secures $170 Million to Expand Investment Platform

A leading European cryptocurrency trading platform has successfully completed a substantial funding round, fueled by significant growth, and is preparing to broaden its asset offerings.

Bitpanda, a “neobroker” aiming to simplify investing for individuals in bitcoin, digital assets, gold, and traditional stocks, has raised $170 million in a Series B funding round. This investment values the company at $1.2 billion. Headquartered in Vienna, Austria, Bitpanda has become the nation’s first startup to achieve “unicorn” status – surpassing a $1 billion valuation.

Shifting Focus to a Pan-Investment Platform

“We are evolving into a comprehensive investment platform, extending beyond a solely crypto-focused broker,” stated Eric Demuth, CEO and co-founder of Bitpanda, alongside Paul Klanschek and Christian Trummer. Bitpanda’s initial strategy centered on capturing the largely untapped European investor market.

“Within the EU, less than 10% of the population currently holds stocks, and our expansion is directly correlated with this potential,” Demuth explained.

Currently operating in Austria, France, Spain, Turkey, Italy, and Poland, Bitpanda intends to extend its reach to additional markets this year. Plans include establishing hubs in Madrid, Barcelona, London, Paris, and Berlin.

New Investment Options on the Horizon

The company anticipates launching support for Exchange Traded Funds (ETFs) and “fractional” trades in April. These features will enable investors to allocate smaller amounts of capital to desired stocks.

Despite the expansion, cryptocurrency remains the dominant activity on the platform, with Bitcoin trading significantly exceeding other digital currencies.

Investment Details and Backers

Valar Ventures, the fund backed by Peter Thiel, led the funding round. Participation also came from unnamed partners from DST Global (Yuri Milner’s fund), both of which are recognized investors in cryptocurrency startups.

Valar Ventures also participated in Bitpanda’s previous funding round six months prior – a $52 million Series A. Since then, Demuth and Klanschek report a dramatic surge in growth, mirroring the increase in Bitcoin’s price.

Rapid Growth and Revenue Projections

Key performance indicators, including revenue and customer acquisition, have “increased approximately tenfold,” according to Klanschek. The platform has added roughly 700,000 users in the last six months.

“We anticipate exceeding €100 million in revenue for the first few months of this year,” Klanschek stated. Annualized revenue is projected to reach €300-400 million.

While primarily serving individual investors, Bitpanda also caters to corporate clients. Daily trading volume on the platform’s “Pro” tier for companies has risen from $2 million in September to over $25 million currently.

A Broader Trend in Personal Finance

Bitpanda’s growth reflects a larger trend of increased consumer engagement in personal finance, accelerated by the COVID-19 pandemic.

Lower interest rates, economic uncertainty, the proliferation of financial apps, the rise of cryptocurrency, and the influence of social media have prompted individuals to explore a wider range of investment options, even those with limited prior experience.

Strategic Fundraising for European Dominance

Recognizing this trend, Bitpanda proactively initiated a fundraising effort last year. “We are already profitable, having maintained profitability for four years,” Demuth said. “However, in September, we shifted our strategy to become ‘the’ investment platform for all of Europe. This required securing additional partners and capital to attract top talent, leading to the Series A round. Following that, we engaged with our investors, who expressed strong support and facilitated further investment.”

Democratizing Investment Access

Despite the considerable hype surrounding cryptocurrency, it remains largely an adopter phenomenon, with limited mainstream understanding. However, platforms like Robinhood, Square Cash, and Bitpanda are lowering barriers to entry, making it easier for individuals to participate in trading with smaller amounts of capital.

Regardless of the long-term viability of cryptocurrency, the trend towards democratizing investment is likely to persist, empowering individuals to manage their finances more effectively.

Looking Ahead

“In today’s financial landscape, everything is interconnected,” Klanschek noted. “We observed significant growth on Bitpanda following the stock market crash in March 2020.” Even as crypto values declined, “interest remained high.” With traditional savings accounts offering minimal returns, “this ultimately fueled increased interest in financial markets, establishing crypto as a distinct financial asset category.”

James Fitzgerald, founding partner of Valar Ventures, commented, “Since joining the board last September, we have been consistently impressed by the work of Eric, Paul, and the team. The pandemic-driven increase in interest in personal finance, coupled with Bitpanda’s comprehensive offering and commitment to simplifying investing for a new generation of retail investors, positions it perfectly to capitalize on this trend. With over 700,000 new users in just six months, we are confident in the platform’s appeal and excited to expand Bitpanda’s reach to every investor in Europe.”

Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion. Use code “TCARTICLE at checkout to get 20% off tickets right here.