A crypto unicorn? Japan startup touts rare $1bn valuation

Liquid Group, a Tokyo-based crypto-currency trading platform, put out a press release Wednesday that it had raised venture funds at a valuation in excess of $1bn, making it one of the rare so-called unicorns in Japan.

The startup has secured funding from investors including venture fund IDG Capital and crypto mining giant Bitmain Technologies, it said in the statement, but in a somewhat unusual step didn’t disclose how much money it had taken in. Liquid has commitments for about $50m, according to a person familiar with the matter, a relatively small amount for such a lofty valuation. Startup valuations are viewed skeptically if the amount of capital raised is less than 10%.

That’s not to take away from Liquid’s progress in building its business, including securing a coveted crypto-exchange license from Japan’s financial watchdog and handling more than $50bn in cumulative trading volume. IDG is also a marquee investor, having funded crypto startups such as Coinbase and Bitmain.

Crypto startups have a history of pushing aggressive valuations. In June, Circle Internet Financial raised $110m, valuing the mobile payments and crypto trading platform at $3bn. Coinbase raised $100m in 2017 at a valuation of $1.6bn. Non-crypto startups tend to raise even larger in their unicorn rounds.

Liquid, founded in 2014 and previously known as Quoine, raised the latest funds as part of its on-going Series C round. Co-founders Mike Kayamori and Mario Gomez Lozada had raised more than $20m in prior rounds from investors including Jafco Separately, they raised $100m through an initial coin offering in 2017.

The new funding will be used for global expansion and comes amid rising optimism that last year’s brutal correction for crypto assets is coming to an end. Bitcoin has jumped more than 20% this week to its highest in five months.

Japan has few startups valued at over $1bn, as loose listing rules make it easy for founders to go public sooner than in other countries. Online flea market operator Mercari became the nation’s first unicorn in 2016. At the time, the US already had 92 unicorns.

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