FTX is considered by many to be the 'Goldman Sachs' or 'Citadel' of the cryptocurrency universe. This is because they are very successful and profitable, especially on a per-employee basis. Further, the company is much savvier than many of its competitors. This is clear as many are going bankrupt or struggling for survival, while FTX circles these dying businesses, looking for opportunities to extract any value.
Currently, the company is reportedly looking to raise $1 billion at a $32 billion valuation which would be an equivalent valuation to its previous funding round. This flatness in valuation is a moral victory of sorts as most crypto companies are seeing losses between 70% and 99% during this 'crypto winter'. For instance, its primary competitor Coinbase (Nasdaq: COIN) has lost 75% of its value YTD.
According to reports, the company is in the midst of negotiating the fundraising round and terms could change. The company previously raised $400 million in January, and some of its most prominent investors include Singapore's Temasek, Softbank's Vision Fund 2, and Tiger Global.
FTX is looking to take advantage of the dislocation in the crypto markets and would likely look to buy more distressed assets with more capital on hand. It's positioned itself as the market consolidator that has often been the lender or liquidity provider of last resort. In a sense, it's a similar role to what Berkshire Hathaway (NYSE: BRK.A) played during the financial crisis and Great Recession when the company was able to pick up some bargains and its seal of approval was enough to bring other investors onboard.
Only time will tell if FTX will achieve similar success during this brutal bear market in cryptocurrencies. Some of its potential bargain hunting include an option to buy BlockFi, discussions to buy South Korean exchange Bithumb, and an offer to buy Voyager Digital that was rejected for being too low. There have also been rumors of interest in Robinhood (Nasdaq: HOOD) as FTX founder Sam Bankman-Fried already owns a sizeable stake.
Although FTX is weathering the storm better than other crypto companies, it's uncertain how much it's been affected by the drop over the last 6 months. According to a leaked investor deck, the company had $270 million in Q1 revenue, while it had $89 million in all of 2020 and $1.02 billion in 2021. The company also had a net income of $388 million last year.