tl;dr
Kraken is reportedly seeking to raise up to $1 billion in debt as it prepares for a potential initial public offering (IPO). Goldman Sachs and JPMorgan are leading the fundraising effort, with discussions also involving additional banks and direct lenders. The debt raise could potentially be as low ...
Kraken, a prominent cryptocurrency exchange, is reportedly considering a substantial debt raise of up to $1 billion as part of its preparations for a potential initial public offering (IPO). Leading the fundraising endeavor are reputed financial institutions like Goldman Sachs and JPMorgan, who are engaged in preliminary discussions with additional banks and direct lenders. While the projected debt raise could reach a significant $1 billion, there is also contemplation of a smaller amount, possibly around $200 million.
The generated proceeds from this debt raise are intended for advancing growth initiatives rather than covering operational requirements. Alongside the debt issuance, Kraken may also contemplate an equity raise, although the specifics regarding the size and structure of this potential capital influx remain undetermined. While these discussions are ongoing, no final decisions have been reached, and the terms are expected to evolve as the deliberations progress.
These developments come amidst speculations of an IPO for Kraken as early as the first quarter of 2026. In an encouraging sign, the exchange recently reported a substantial revenue of $1.5 billion in 2024, marking a remarkable 128% surge from the previous year. Furthermore, its adjusted EBITDA surged to $380 million, reflecting robust financial performance.
Simultaneously, Kraken announced the acquisition of NinjaTrader, a retail-focused futures trading platform, in a deal valued at $1.5 billion. This strategic move aims to bolster Kraken's derivatives offerings, aligning with its broader agenda of scaling operations and positioning itself for potential entry into the public markets. Notably, Kraken holds nearly $43 billion in customer assets and boasts an average revenue of over $2,000 per customer.
Thus, the planned debt issuance stands to significantly enhance Kraken's strategic financial position as it charts its course toward expanding operations and potentially venturing into the public markets.