UK hedge fund billionaire Alan Howard backs crypto investment platform Kikitrade

Allen Ng, co-founder of Asia-based crypto investment platform Kikitrade. Source: Kikitrade

Kikitrade, an Asia-based crypto investment platform, has closed a Series Pre-A extension round of financing from British hedge fund billionaire Alan Howard, as the startup ramps up efforts to serve increasingly tech-savvy young generations across largely untapped markets.

Howard, Britain’s influential dealmaker and founder of hedge fund Brevan Howard Asset Management, poured $4 million into the extended round, bringing Kikitrade’s total capital raised to $12 million.

Kikitrade co-founder Allen Ng told DealStreetAsia that the addition of Howard to the shareholder list will help the startup identify potential market opportunities, strengthen partnership outreach, enhance brand recognition, and further expand at a global scale.

“Crypto is a global industry from day one,” said Ng. “The universal nature of crypto itself means it is less restricted by geographic differences compared to other sectors like e-commerce and traditional digital banking.”

The extended round came only two months after Kikitrade announced the completion of its Series Pre-A round at $8 million this April.

The previous deal was jointly led by blockchain venture fund Dragonfly Capital; global venture capital (VC) firm Cherubic Ventures; and Animoca Brands, a blockchain gaming firm led by Hong Kong-based entrepreneur Yat Siu. A wide range of global investors, including Ehtereum co-founder Joseph Lubin, also participated in the investment.

Kikitrade’s management team got in touch with Howard shortly after the completion of the earlier transaction, said Ng. It only took “a couple of calls over a period of a few weeks” for Howard’s team to decide on the commitment.

Rising investor interest

Kikitrade, founded in March 2020, is the latest beneficiary of the rising acceptance of digital currencies in Asia – a trend that has attracted more investors’ interest and venture funding.

The total value of crypto and blockchain deals globally has surged in the past five years, according to data from Pitchbook. Crypto and blockchain companies have collected a combined $15.8 billion so far this year, tripling that of 2020. At 473, the number of deals in the sector is already more than half of what was completed last year.

Amongst the latest fundraisers, Hong Kong-based crypto financial-services startup Babel Finance announced in May the completion of its $40-million Series A round from investors including Sequoia Capital China and Dragonfly Capital. New York-based Tiger Global Management; BAI Capital; and Zoo Capital, the early-stage venture fund of Chinese private equity (PE) firm Boyu Capital invested in Babel as their first crypto portfolio in Asia.

In the same month, Indonesia-based crypto exchange startup Pintu also secured $6 million in a Series A round led by US hedge fund Pantera Capital; Indonesia-focused Intudo Ventures; and Coinbase Ventures, the corporate VC arm of US crypto firm Coinbase.

DealStreetAsia learnt earlier this month that Global crypto exchange Luno is weighing entry into the Southeast Asian market by setting up a joint venture with Indonesian conglomerate Lippo Group, while Jakarta-based Tokocrypto, backed by the world’s major crypto exchange Binance, is looking at a public market debut.

As Asia’s crypto market heats up and more global investors flocking into the region, Kikitrade is raising its stake to grab a larger share.

With a team of nearly 70 people, Kikitrade focuses on expansion across economies with “high income, high population density, and old money,” where the cryptocurrency ownership is under 5% across most economies, compared to double-digit rates registered by countries like the US and South Korea, said Ng.

“Instead of only serving professional crypto traders, Kikitrade wants to build a platform for the general public… with much more user-oriented, friendly services and much more warmth to the product rather than just a trading execution platform filled with tedious numbers,” said Ng.

He added that over two-thirds of Kikitrade’s users are millennials and Generation Z investors. Overall, more than half of its users came from friends’ referrals.

Currently serving retail investors across Hong Kong, Taiwan, Southeast Asia, and Australia, Kikitrade will further step up its development in these existing markets, while actively looking into opportunities in regions including Europe, said Ng. The firm is also in conversations for potential partnerships in the Middle East and Africa, under which it is likely to serve as an enabler to “export” its crypto expertise and industry know-how to local partners.

The startup is expected to grow the team size by about 100 employees by the end of 2021, with the proportion of engineers increasing to up to 70% from 60% to enable it to upgrade products faster.

An underdog of all time?

Ng, who created Kikitrade alongside Sean Tao, a Chinese entrepreneur and partner at another Ng’s venture Everest Ventures Group (EVG), aspires to grow the startup into an online platform beyond just crypto trading, by using the playbook of China-based stock-market equivalents like Futu, Tiger Brokers, and Snowball Finance.

“I think Futu, Tiger, and Snowball are some of the best products in stock investments,” said Ng. “We actually learnt a lot from these fintech unicorns in the investment world. I think the Chinese ones do extremely well in the social part, in terms of integrating multiple functions.”

His vision of the future Kikitrade should be “an Instagram-like investment community” with crypto trading capabilities, aggregated market-related news feeds, and a social feature that allows users to learn, participate, interact, and “take away their bias about crypto.”

The startup’s ambition in building an all-round crypto platform comes as governments in Asia are tightening scrutiny over the nascent industry due to concerns of cryptocurrencies being a speculative investment.

China in May announced a tougher ban on banks and payment companies offering crypto-related services. India has cracked down on cryptocurrencies while Singapore, South Korea, and Japan have released public warnings on the risk of investing in the assets.

“It’s a cut down on one hand, but I think it’s also trying to restore order in an industry [that has been] growing wild over the past few years,” said Ng, commenting on the latest crypto ban in China. “Crypto came out as an underdog in the last 10-plus years after Satoshi invented Bitcoin. We have been always working on a very rough, difficult path where everyone is throwing stones at you… I think the industry has built a strong level of resilience and endurance. And I think it will continue to be more resilient down the road.”

“Overall, it is not a disastrous move,” he said since it could make more China-born players consider the option of “competing at a more global level and getting out of their comfort zone.”

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.