ICE-Owned Crypto Trading Exchange Bakkt Is Going Public

Investing

Crypto trading exchange Bakkt, which counts NYSE-owner Intercontinental Exchange, Inc. (ICE) among its investors, is going public at the New York Stock Exchange (NYSE) via a merger with VPC Impact Acquisition Holdings Inc., a special purpose acquisition company (SPAC). SPAC companies raise money from public markets specially for the purpose of merging with startups in a particular sector and to take them public. The company will be renamed Bakkt Holdings, Inc.

Key Takeaways

  • Bakkt, the crypto futures trading exchange backed by ICE, is going public at a $2.1 billion valuation.
  • Bakkt was started as a trading platform for Bitcoin futures and options but has since pivoted to developing consumer applications for digital assets.

From Futures Platforms to Digital Wallets

Started in 2019, Bakkt was initially a trading venue for trading Bitcoin futures and options. The company’s founding team consisted of ICE CEO Jeffrey Sprecher and his wife, former senator Kelly Loeffler, who also served as the company’s first CEO.

While it is an end-to-end regulated trading platform, the company has failed to rack up substantial trading volumes for its contracts in an industry where the Chicago Mercantile Exchange (CME), which launched its futures contracts in 2019, leads the pack. Bakkt has since pivoted from its initial vision of providing “trust and transparency” to the digital assets ecosystem to developing consumer applications for digital assets. It launched a digital wallet last year and tested integration of “Bakkt cash” with Starbucks. The wallet’s scope was later expanded to all kinds of digital assets, including rewards miles and loyalty points. In May 2020, Bakkt acquired Bridge2 Solutions, a loyalty rewards company, for $300 million.

According to Crunchbase, Bakkt has raised $482.5 million. Apart from ICE, the New York-based company’s investors include Microsoft Corporation’s (MSFT) venture capital subsidiary M12, Boston Consulting Group, and Goldfinch Partners. Bakkt is valued at $2.1 billion in the public markets. When it raised $300 million from investors last May for the Bridge2 Solution acquisition, Bakkt was reported to have a valuation of more than $1 billion.

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Bakkt’s announcement comes on the heels of San Francisco-based crypto exchange Coinbase’s filing of a draft registration statement with the Securities and Exchange Commission (SEC) for an initial public offering (IPO).

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