Unnamed sources informed Bloomberg that cryptocurrency financial services provider Blockchain.com is allegedly in discussions for a new investment round that might value the platform below the $14 billion figure it disclosed earlier this year.
Planned Fundraising Could Cause a Significant Valuation Reduction
The rumored down-round fundraising might reduce Blockchain.com's valuation by much to 78%. This comes after a crypto bear market disrupted most blockchain platforms earlier this year, including the aforementioned digital asset exchange.
According to the Bloomberg report, the funding would come after the company received strategic financing in the third quarter at an undetermined valuation from investors led by UK-based investment firm Kingsway Capital.
Blockchain.com announced in March that it had completed a round that more than doubled its estimated value to $14 billion and featured investors Baillie Gifford and Lightspeed Venture Partners.
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All of these discussions on down-round financing are still in their early phases, and no deals have been reached. One thing is certain: the fundraising will result in a considerable reduction in Blockchain.com's valuation. According to Bloomberg, the crypto platform's value might be reduced from $3 billion to $4 billion.
Proactive report says that the rumors are consistent with a larger pattern that has seen venture capital investments in cryptocurrency firms decline. In the third quarter of 2022, venture capital companies invested $4.44 billion in cryptocurrency startups, a 37% decrease from the corresponding period in 2021.
Blockchain.com is a mid-sized exchange that began as a bitcoin scanner in 2011 before developing a massively popular wallet in 2012. Since cryptocurrency prices began to fall earlier this year, the site has faced some difficulties. The company reported significant exposure to Three Arrows Capital's downfall and stated that it was cooperating with probes into the disgraced crypto hedge fund.
Blockchain.com Introduces Crypto Visa Card
In other news, Blockchain.com has introduced a new crypto Visa card with 1% cashback on crypto rewards. According to Bitcoin.com, 50,000 people have signed up for the queue for the new crypto-centric pre-paid Visa card.
"There's still a lot of demand for crypto products, but you're seeing that demand shift away from trading and more towards folks that are interested in using DeFi, using their balances," Blockchain.com CEO Peter Smith said in a Yahoo Finance interview.
.@Blockchain CEO @OneMorePeter on the company's new Visa card: "The idea is you can take your card... and can easily spend from any balance inside your blockchain wallet... and you can toggle between which asset you spend from." https://t.co/Jb7k9tf4PH pic.twitter.com/OzXn5W1GkF
— Yahoo Finance (@YahooFinance) October 26, 2022
The Blockchain.com Visa Card is issued by Pathward, N.A., Member FDIC, under license from Visa U.S.A. Inc. The Blockchain.com Visa Card is powered by Marqeta, and it is accepted anywhere Visa debit cards are recognized.
All qualifying US consumers will be able to obtain the Blockchain.com Visa Card. Customers must also have a Blockchain.com Wallet account that has been confirmed. Blockchain.com will convert cryptocurrencies to US dollars for use in purchases and ATM withdrawals.
