Crypto Exchange KuCoin Hits $10 Billion Valuation in Latest Financing Round

In May, crypto exchange KuCoin raised $150 million in its pre-Series B funding round, bringing its valuation to $10 billion. The funding was led by Jump Crypto and included other investors such as Circle Ventures, IDG Capital and Matrix Partners.

While KuCoin is best known for its exchange services – with more than 600 coins listed and approximately US$2 billion registered in daily trading volume – it is now looking to venture into other areas of blockchain technology. This includes exploring play-to-earn games, NFTs, and decentralized financial (DeFi) protocols.

Here’s a look at how Singapore-based KuCoin became a “unicorn” and one of the largest crypto exchanges in the world.

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Michael Gan, co-founder of KuCoin / Image Credit: LetKnow.News via Medium

The idea behind KuCoin was first conceived in 2013 by two of the company’s co-founders, Michael Gan and Eric Don. At a time when cryptocurrency was just starting to emerge, the two were among the first to realize its potential.

While exploring the domain, they found it extremely tedious to buy and sell cryptos. Even the largest trading platform of the time, Mount Gox, was quite difficult to navigate. Determined to solve this problem, Gan and Don set out to encrypt their own crypto exchange.

It will take another four years before the KuCoin exchange sees the light of day. Founded in Singapore in 2017, the platform has raised $27.5 million through its initial coin offering (ICO).

Investors could purchase the KuCoin (KCS) cryptocurrency, which received the following incentive: 50% of the trading fee income generated by KuCoin would be distributed to KCS holders. This is still the case today.

Within three months, Kucoin had over 300,000 registered users – an almost unprecedented growth in the crypto industry at the time.

Given its success, the platform held its first seed round shortly after. A total of $20 million was raised, mainly from IDG Capital and Matrix Partners, who also participated in KuCoin’s latest funding round.

How is KuCoin different from other crypto exchanges?

Dozens of new crypto exchanges have been set up in the past two years, but KuCoin has managed to keep growing steadily. In December 2021, the platform reached a user base of 10 million people.

One of the things that sets KuCoin apart is its focus on altcoins. The platform bills itself as the “best altcoin exchange”, offering hundreds of crypto coins not found on other exchanges.

Listing standards vary from platform to platform, but many centralized exchanges only offer established cryptocurrencies with large market caps.

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KuCoin displays new coins daily / KuCoin screenshot

For users looking to speculate on lesser known coins, this can be a drawback. They are forced to transfer their holdings and use a decentralized exchange to buy their favorite altcoins. KuCoin helps solve this problem with its wider offering.

Another aspect that helps KuCoin stand out is its community focus. Through its social trading feature, the platform allows users to interact with community leaders, influencers, and other investors with similar trading preferences.

KuCoin CEO Johnny Lyu, who is also the co-founder, believes this is an integral part of crypto’s mass adoption and something that is often overlooked.

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Johnny Lyu became the CEO of KuCoin in 2020 / Image Credit: KuCoin

“Most practitioners in the crypto industry were focused on creating better tools to improve the interaction between people and protocols,” Lyu said in 2021. Facilitating interactions between people was not considered a priority.

“This has led to rising education costs and slower industry adoption, creating barriers to mass adoption.”

Where does KuCoin go from here?

As blockchain technology continues to launch new utilities, KuCoin is branching out from its exchange services. The platform has been researching DeFi, NFT and the metaverse since 2020 and plans to dig deeper with its latest round of funding.

Founded in 2021, KuCoin Labs is the company’s research institute dedicated to identifying promising crypto projects and helping them achieve sustainable growth. Armed with a $50 million fund, he has worked on notable projects such as Bloktopia, Antimatter and Star Terra.

On the NFT side, KuCoin announced its $100 million “Creator Fund” in April, which will be controlled by its venture capital arm, KuCoin Ventures, and NFT marketplace, Windvane.

The fund is dedicated to incubating early stage NFT projects spanning areas such as arts, sports, GameFi and Asian culture.

“At the current stage of KuCoin’s expansion of Web 3.0 and NFT domains and deepening of the KuCoin ecosystem, the launch of the $100 million ‘Creator Fund’ will undoubtedly give a strong boost to our process development,” said Lyu .

Featured Image Credits: KuCoin/Johnny Lyu

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