Mercado Bitcoin, Brazil’s first crypto exchange, raises $200 million from SoftBank – TechCrunch

Mercado Bitcoin, a Latin American digital asset exchange, has raised $200 million in Series B funding from the SoftBank Latin America Fund.

round values Group 2TMthe non-operating parent company of Mercado Bitcoin, with $2.1 billion, placing it among the top 10 unicorns in latin america.

Funding arrives a few months later Based in São Paulo Series A Bitcoin Market Round (undisclosed amount) in January 2021, which was co-led by G2D/GP Investments and Parallax Ventures, with the participation of HS Investimentos, Gear Ventures, Évora and Genial. JPMorgan and DealMaker.

Image credits: MarketBitcoin

It also comes after an impressive first half of the year for the company. Between January and May 2021, Mercado Bitcoin says around 700,000 new customers signed up to use its services, bringing its customer base to 2.8 million. That’s more than more than 70% of all individual investor based on the Brazilian stock exchange, according to the company. Furthermore, during the first five months of the year, Mercado Bitcoin saw its trading volume increase to $5 billion, which is more than the total volume it saw in its first seven years combined. It is also 11 times the volume experienced during the same period in 2020.

Founded by brothers Gustavo and Mauricio Chamati in 2013, Mercado Bitcoin was the first cryptocurrency exchange in Brazil. The company has been profitable since 2018, and as of January 2021 had been driven from the ground up, reinvesting its cash generation into growth and portfolio expansion, according to CEO and executive president of Grupo 2TM, Roberto Dagnoni.

“This makes us somewhat of a unique case in the ecosystem and among our fintech peers in general: few companies have managed to reconcile greater than 100% year-over-year growth with a positive bottom line,” he told TechCrunch, describing Mercado Bitcoin as “the crown jewel” of Group 2TM.

The holding company owns a number of other entities such as Meubank, a multi-asset wallet and account service currently awaiting a license from the Central Bank of Brazil; Bitrust, a qualified digital custodian, and Clearbook, an equity crowdfunding platform, among others.

In 2019, 2TM Group became the first company in the world to tokenize public debt assets. Then, in 2020, the company issued Futecoin, the world’s first digital asset based on the FIFA solidarity mechanism.

“We have also tokenized or distributed private debt, carbon credits, and a variety of utility and DeFi tokens,” Dagnoni said. This year, Bitrust will extend the first Digital Custody service based in Latin America.

“There is much more to come, and the series B round will be a relevant factor in supporting continued innovation,” added Dagnoni. While he declined to disclose the amount of Mercado Bitcoin’s Series A round, he said it allowed the company to invest around $40 million in expanding its operations in Brazil this year.

Today, Mercado Bitcoin has around 500 employees. That compared to around 200 a year ago. By the end of the year, Dagnoni projects it will have a workforce of around 700.

In addition to hiring, he said that Mercado Bitcoin/2TM will also use the new capital to expand its service offerings and invest in infrastructure “to meet the growing demand for crypto in the region.” In particular, the company will focus on acquiring new customers and product listings, as well as expanding into other countries such as Mexico, Argentina, Colombia and Chile “through a combination of mergers and acquisitions and greenfield operations,” according to Dagnoni.

So what exactly is it that has driven so much growth for Mercado Bitcoin? Dagnoni believes there are a number of factors behind this.

“Millions of people around the world are realizing that digital assets and cryptocurrencies are innovative in their technological foundations and efficient in storing value, and Brazil is no exception to this trend,” he said.

In addition, the country has seen some of the lowest interest rates on record, which he said has fueled the development of the alternative asset industry.

“Crypto is taking advantage of this trend, which is also showing for other asset classes, such as VCs and private equity,” Dagnoni said.

And finally, he believes that the fact that Brazil’s financial services industry is so concentrated has meant an opportunity for fintech in general in the country.

Paulo Passoni, Managing Partner of SoftBank’s SBLA Advisers Corp. (which manages SoftBank Latin America Fund) described Mercado Bitcoin as a “regional leader in the crypto space” that is “tapping into a huge local and regional addressable market.”

He added: “At SoftBank, we seek to invest in entrepreneurs who are challenging the status quo through technology-centric or technology-enabled business models that are revolutionizing an industry – Mercado Bitcoin is doing just that.

SoftBank has been active in Latin America lately. In early June, the Japanese investment conglomerate said it would invest “up to $150 million” in Grupo Bursátil Mexicano (GBM), a 35-year-old investment platform on the Mexican stock exchange.

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