Coinbase-backed Crypto Financial Startup Amber Group Raises $1B Investment Round

Coinbase-backed cryptocurrency financial services company Amber Group raise worth $1 billion in funds, aiming at providing investors with many different cryptocurrency products for investment.

The latest funding round continues a flurry of funding activity in the cryptocurrency sector. The financing was led by the well-known investment China Renaissance. In addition to Coinbase, other investors include Tiger Global Management, headquartered in New York. Amber Group has raised $100 million before this round of financing as investors rush to back companies in the industry. 

This Hong Kong-based cryptocurrency financial services startup company stated that the new funds raised this time will be used for strategic acquisitions, such as cybersecurity. In order to fulfil regulatory safety and compliance, acquisition targets mainly focus on companies with regulatory licenses in certain jurisdictions.

Michael Wu, CEO of Amber Group, said:

"I think regulation is always a challenge for this industry because it’s a very global industry. It’s always about staying ahead or at least staying aware of the different regulations. We always take a very conservative approach to that."

The CEO also said the fresh capital raised would be used to “hire even more aggressively” and to make strategic acquisitions in areas such as cybersecurity.

According to PitchBook data, in Q2 of this year, the total amount of venture capital investment in cryptocurrency and blockchain startups was approximately $14 billion, compared to $600 million in the same period last year.

With the participation of institutional investors and large companies, both ordinary investors and institutional investors have increased their interest in cryptocurrencies, especially Bitcoin, this year.

Amber Group's revenue mainly comes from the so-called net interest margin, a measure of lending profitability, to make profits, which takes 70%~80%. The main model is to accept customer deposits and provide deposit interest rates and then lend funds to other entities with a higher interest rate. About 15% of revenue comes from transaction fees.

Amber Group CEO Michael Wu said the company is bringing a “private banking experience to everyday customer.”

The group's current main service targets are primarily institutional investors and wealthy people, providing products, including services such as algorithmic trading and lending products. In addition, the company is striving to gain individual investor customers. And it is expected to achieve $500 million in revenue by the end of this year.

Wu stated that:

"We don’t advocate heavy speculation or high use of leverage, rather we want our customers to be more long term, focus on risk management and get stable and attractive yield."