Bakkt Holdings, a cryptocurrency platform majority owned by Intercontinental Exchange, has announced its intention to go public through a combination with a blank check company, bringing together two of the most sparkling elements in the U.S. markets.
The parent company of the New York Stock Exchange, ICE, said Monday that Bakkt had agreed to partner with a Spac sponsored by Chicago-based investment firm Victory Park Capital.
Bakkt, formed by ICE in 2018, plans to launch an app in March that will allow users to buy and sell cryptocurrencies and manage other digital assets such as loyalty points and gift cards. Its ambition is to reach more than 30 million customers by 2025, against none last year, she specifies in her regulatory file. The app, currently accessible by invitation only, has attracted interest from around 400,000 people wanting early access, Bakkt said.
When listed on the NYSE, it will have an enterprise value of $ 2.1 billion, ICE said.
Monday’s deal shows how a growing number of businesses and mainstream investors are dabbling in the cryptocurrency industry. Bakkt’s plans for a public market launch come about a month after the announcement of Coinbase, a well-known digital currency exchange his intention to float its shares in an initial public offering
The announcement also shows how Spacs provides a smoother path to public procurement for companies with new technologies and companies at an earlier stage. Last year, Spacs accounted for nearly $ 76 billion of the $ 159 billion raised by IPOs in the United States, surpassing traditional listings since August.
Veteran investor Jeremy Grantham last month described the Spacs craze as “objectionableAlthough he himself made some $ 200 million on an early bet on battery maker QuantumScape after it was released on a Spac vehicle.
The growing focus on digital assets comes as bitcoin, the most actively traded digital token, has gained in value in recent months. However, volatility remains high, highlighting the immaturity of the asset. Bitcoin prices fell about a fifth earlier this week as Britain’s main financial regulator renewed his warning that consumers who invest in cryptocurrencies must “be prepared to lose all their money.”
Bakkt also offers a cryptocurrency storage service and Bitcoin derivative contracts. ICE revenue related to Bakkt is expected to be approximately $ 9 million for the fourth quarter of 2020, with operating expenses of approximately $ 39 million. It will have some $ 500 million in cash on its balance sheet, reflecting $ 207 million held by the Spac trust account and a $ 325 million private placement of shares in the combined entity, including a contribution of $ 50 million from ICE.
Gavin Michael, former head of technology at Citigroup’s World Consumer Bank, will take the reins as chief executive of the merged company, Bakkt said on Monday. “The average consumer owns a multitude of digital assets, but rarely tracks their value and lacks the tools to manage and use them,” said Michael.
David Clifton, acting chief of Bakkt, will join the board of directors of the merged company after the deal closes.