SG-based crypto investment unicorn Matrixport has big plans for 2022

John Ge, CEO of Matrixport

Singapore-based cryptocurrency investment platform Matrixport says it plans to double the value of assets under its management and custody, and the number of users on its platform in 2022, riding on the current surge in interest in digital coins.

Matrixport, which currently offers trading, lending, and custody of digital assets, will also explore new product features such as non-fungible tokens (NFTs), and decentralised autonomous organisation (DAO) next year, its co-founder and chief executive John Ge told DealStreetAsia.

The 260-employee startup now has $10 billion in custody under management, $3 billion in AUM, and a monthly trading volume of $500 million, added Ge. He, however, did not disclose the number of users of the platform.

Matrixport, which was spun off from the Chinese bitcoin mining firm Bitmain in 2019 after the latter ran into a cash crunch, reached a valuation of over $1 billion in August this year following its $100 million Series C round. DST Global, C Ventures, and K3 Ventures led the round that saw participation from the likes of Tiger Global, and Dragonfly Capital.

The latest funding will help to achieve more than business growth, said Ge, who co-founded Matrixport along with the Chinese billionaire Jihan Wu.

The other point of the round is to have reputable investors — “respected in the traditional world” — on Matrixport’s cap table. The move will help to shore up the company’s branding and earn the trust of regulators and also conservative investors, who may prefer the crypto services of traditional banks over platforms like Matrixport.

The company’s next fundraising will likely happen in 2022, Ge said.

Matrixport turned profitable in the fourth quarter of 2020, Ge said, declining to disclose its latest profit, revenue, and the number of users. The company had clocked $7-8 million in revenue in 2019, according to Bloomberg, citing information Matrixport pitched to investors.

It charges a fixed transaction fee for its trading services, whereas it levies a charge of between 1% and 10% for its asset management services.

Competition

Though banks like Singapore’s DBS and Thailand’s Siam Commercial Bank (SCB) are entering the crypto world — DBS launched its own crypto exchange this year and SCB bought a majority stake in Bitkub in November, making it a unicorn— Matrixport’s infrastructure to handle crypto financial services is already well developed, Ge said.

“Even though these traditional banks are quite large…if they want to enter the crypto world, they still need to do a lot of things, like building a new system,” he explained. 

The company pulled out of China in October this year, a month after the country banned cryptocurrency transactions. Ge said it did not affect the company’s business significantly as Chinese users made up less than 20% of its customers.

Matrixport allows users to trade, invest, save with interest, and borrow cryptocurrencies on its app.

When he and Jihan Wu started Matrixport, there were already many exchanges for trading crypto, but few offered complex services such as asset management seen in traditional finance, Ge said.

Investment products Matrixport offers include a dual currency product that guarantees a return upon expiry, and a ‘smart pool’ lending product where users lend to a group of decentralised finance projects. In June this year, it launched a ‘flexi saving’ product that lets users earn interest by depositing their cryptocurrencies without fees. More recently, it allowed users to buy and sell bitcoin above or below the market price through an option contract.

Despite the recent withdrawal of the world’s largest cryptocurrency exchange Binance from Singapore, Ge thinks Singapore is still welcoming of crypto. “It’s open doesn’t mean they can allow everything. It still needs to be regulated.” 

Next year, its app will support more cryptocurrencies and new assets and tools like NFTs and DAOs. The latter refers to groups without a central authority where members get voting power or equity usually by buying the group’s token. One way may be to get users who want to invest together in a certain project to be part of a DAO, said Ge.

IPO plans

Going public is not in Matrixport’s immediate plan but will happen within the next five years, Ge said. It will consider the Singapore and US stock markets. 

“For the IPO, we are already profitable, so money is not the purpose. IPO for the branding [since] you are more trusted when you’re a public company,” he said. 

“We are waiting for a perfect timing…where we won’t get into trouble and not have a lot of limits on the business,” Ge added, saying that they are waiting for a clearer framework from regulators towards crypto players, and for crypto to become more mainstream. 

While the upcoming interest rate hike could affect crypto’s already-volatile prices — some investors may return to traditional assets, while others may default — crypto is “driven by the new technology [and] users”, not price, he said.

Prior to Matrixport, Ge was the head of investment and financing, for over four years, at Bitmain. Co-founder Jihan Wu had stepped away from Bitmain following a bitter dispute with co-founder Micree Zhan.

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.