Deribit, the largest bitcoin options exchange by market share, has raised funds from existing investors at a $400 million valuation, four sources with knowledge of the matter said.
The Panama-based exchange raised around $40 million in the deal, said two of the four sources. Its existing shareholders include QCP Capital, Akuna Capital and Dan Tapiero's 10T Holdings.
The fundraising comes three months after Deribit took a "small" hit from liquidating Three Arrows Capital's (3AC's) positions after the now-bankrupt crypto hedge fund failed to meet margin calls. Deribit raised new capital to restore its reserves to where they were before the 3AC incident, according to one of the sources.
3AC collapsed in June after suffering huge losses from the Terra ecosystem implosion and the ensuing crypto market turbulence. The fund's $200 million investment in Terra's native luna token sank to almost zero as the TerraUSD algorithmic stablecoin de-pegged from the dollar in mid-May. Deribit initiated a liquidation application against the fund in a British Virgin Islands court in June.
The unique circumstances of the latest fundraise — given the 3AC hit and the current weak market conditions — translated into a steep discount for existing backers, according to one of the sources. Deribit was valued at $2.1 billion in its last funding deal in August 2021, when it raised $100 million, the source said.
The $400 million valuation "is essentially irrelevant" because the fundraising is from existing investors, Luuk Strijers, said Deribit's chief commercial officer. "It could have been any value. It's more a clawback of dividends from existing shareholders. We paid a high divided before and decided it's more prudent to strengthen our balance sheet and retain assets instead of distributing them to shareholders.
Strijers said a company’s true valuation isn’t known until it conducts an external fundraise. He went on to say that Deribit kept its valuation low in this internal round “to avoid discussions” with potential investors and that a company’s valuation matters “only matters when you raise externally.”