Bakkt, the crypto platform owned by the Intercontinental Exchange Inc., said that they plan to have nearly 20m users by next year – twice as many as what’s projected for this year. They also announced that their post-merger enterprise value might reach USD 2.1bn.
Per Bakkt’s investor deck, compared to 9 million users in 2021, the company expects to see 18 million users in 2022. The number is then expected to grow further to 23 million in 2023 and 27 million in 2024.
“Conservative growth assumptions” compared with results of two major trading apps:
Also, according to their projections, in 2025, when they estimate to have 30m active users, their total revenue less transaction based-expenses should be over USD 500m and operating income might hit USD 196m.
Furthermore, as reported last Friday, Bakkt, whose market capitalization is USD 65bn, was in advanced talks to go public through a merger with blank-check firm VPC Impact Acquisition Holdings (VIH).
The news has now been confirmed. VIH, a FinTech-focused publicly traded Special Purpose Acquisition company (SPAC) with USD 207m in cash to be deployed, will be combined with Bakkt, said the investor deck, adding that the private investment in public equity (PIPE) size is USD 325m – while it “implies a [USD] 2.1 billion post-merger enterprise value.”
To me this seems like a well-timed offering to capitalize on both the SPAC and crypto craze and raise $. The valuation seems very frothy – Bakkt will need to fulfill the highly aggressive targets set out above to grow into their initial price.
— Hide Not Slide (@HideNotSlide) January 11, 2021
The Bakkt valuation is an interesting (read: insane) data point for the Coinbase IPO
“The combination of SPAC trust account proceeds […] and the PIPE investment is expected to provide Bakkt with [USD] 574 million of pro forma cash to accelerate growth of the business, notably its consumer product application,” whose widespread rollout is slated for the first quarter of 2021, said the company. The app entered production on an invite-only basis in October 2020 (100,000 active users, with 350,000 waiting to be turned on). Equity trading and “coupons/cash back rewards” are on their 2021 roadmap also.
VIH was sponsored by Victory Park Capital (VPC) a privately held, the Securities and Exchange Commission (SEC)-registered alternative investment firm that has invested more than 6bn in over 115 transactions globally.
Bakkt expects no further capital raises to become profitable, as well as to achieve positive cash flow in 2023.