European cryptocurrency exchange Bitpanda has successfully raised $263 million in a new funding round, elevating its valuation to $4.1 billion. This represents a remarkable 2.4-fold increase from its $1.2 billion valuation just five months ago.
The latest investment was led by Valar Ventures, a venture capital firm backed by American tech billionaire Peter Thiel. Valar Ventures has now invested in Bitpanda three times since initially backing the platform in September of last year. Other participants in the funding round include British billionaire and hedge fund manager Alan Howard, REDO Ventures, LeadBlock Partners, and Jump Capital.
Bitpanda’s total private fundraising has now reached nearly $500 million.
About Bitpanda
Founded in 2014 and headquartered in Vienna, Austria, Bitpanda operates as a fintech platform that allows users to buy and sell cryptocurrencies and precious metals. This year, the company began testing a new service offering round-the-clock stock trading. According to Bitpanda’s co-founder and CEO Eric Demuth, the platform aims to deliver a sophisticated stock trading product by the end of the year.
Demuth emphasized the efficiency of this fundraising process, stating, “When you have close partners with strong financial backing, you don’t even need a full roadshow.” He described the experience as surprisingly straightforward.
Business Model and Market Position
Bitpanda generates revenue through the spread between asset buyers and sellers. Demuth highlighted that the company has maintained profitability under this model for the past five years.
The platform currently serves over three million users, exclusively within Europe. While it hasn’t disclosed detailed annual profit figures, Bitpanda projects a sevenfold increase in revenue for 2021. The company has offices in several major European cities, including Vienna, Berlin, London, Paris, Barcelona, Milan, and Krakow. The newly acquired funds are expected to support expansion into key markets such as France, Spain, Italy, and Portugal.
Unlike some competitors that rely heavily on customer acquisition spending, Bitpanda is also exploring B2B opportunities by licensing its technology to banks and other fintech companies. Several firms are already using Bitpanda’s infrastructure to offer cryptocurrency and stock trading services.
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Industry Context and Competitive Landscape
Bitpanda operates in a competitive space that includes companies like Revolut, Trade Republic, and eToro. The recent surge in "meme stock" trading and growing retail investor interest in Europe have contributed to Bitpanda’s rapid growth.
The rebound of the cryptocurrency market, with Bitcoin climbing back to $48,000 and Ethereum posting gains, has also helped lift the company’s valuation. The entire crypto market capitalization recently surpassed $2 trillion again after a three-month slump.
Demuth expressed optimism about upcoming EU regulations aimed at bringing clarity and structure to the crypto industry. He noted that current draft proposals appear favorable, though he cautioned that last-minute changes by legislators could alter the outcome.
Going Public: Plans and Preferences
Although an immediate initial public offering (IPO) is not in Bitpanda’s plans, Demuth voiced admiration for the direct listing approach taken by UK-based fintech firm Wise. He explicitly ruled out the possibility of merging with a special purpose acquisition company (SPAC), describing the SPAC trend as a “bad example.”
Demuth remains skeptical of the high valuations seen in some parts of the fintech sector, criticizing companies that prioritize marketing spend over sustainable business practices.
Frequently Asked Questions
What services does Bitpanda offer?
Bitpanda allows users to trade cryptocurrencies, precious metals, and stocks. The platform is especially popular in Europe and continues to expand its product offerings.
How does Bitpanda make money?
The company profits from the bid-ask spread on assets traded on its platform. It has been profitable for five consecutive years under this model.
Is Bitpanda planning to go public?
There are no immediate plans for an IPO. However, the CEO has expressed interest in a direct listing model similar to that used by Wise, while firmly rejecting the SPAC route.
Who are Bitpanda's main investors?
Valar Ventures, led by Peter Thiel, is a major backer. Other investors include Alan Howard, REDO Ventures, LeadBlock Partners, and Jump Capital.
In which regions is Bitpanda available?
The platform is currently available only in Europe, with physical offices in multiple major cities. Expansion efforts are focused on Western and Southern European markets.
How has Bitpanda's valuation changed recently?
Its valuation increased from $1.2 billion to $4.1 billion in just five months, fueled by strong investor confidence and growth in user engagement.