The Bitcoin futures exchange Bakkt went public through a merger with VPC Impact Acquisition Holdings, a dedicated acquisition company (SPAC) dedicated to the acquisition of startups.
Both companies have now confirmed the transaction and will list on the New York Stock Exchange (NYSE) under the new name Bakkt Holdings Inc. sometime in the second quarter of 2021. Rumors about the transaction have surged since the beginning of January.
After the merger, Bakkt’s enterprise value is expected to reach $2.1 billion, the company announced on January 11. Bakkt was established in 2018 by the Intercontinental Exchange (ICE), the owner of the New York Stock Exchange, as an institutional crypto trading platform. But the exchange faces fierce competition from market leaders such as the Chicago Mercantile Exchange (CME).
According to the announcement, the exchange will also use private equity financing, using VPC Impact Acquisition Holdings’ existing cash and ICE capital contributions to raise an additional US$582 million.
The money is expected to fund Bakkt’s development of a hub for consumer applications for digital assets. Bakkt is expanding its business model with a new app that allows users to manage crypto assets planned to be launched in March, including Bitcoin (BTC) as well as rewards and loyalty points.
Bakkt said that more than 400,000 customers have pre-registered for the app. The exchange supports more than 30 membership program sponsors and 200 gift card merchants, and its goal is to attract 30 million users in the next five years. Starbucks has integrated Bakkt Cash as a payment method for customers.
Bakkt detailed in the statement that its goal is to “achieve incremental consumer spending, reduce traditional payment costs and strengthen loyalty programs, adding value to all key stakeholders in the payment and digital asset ecosystem.”
Bakkt’s announcement follows the US cryptocurrency exchange Coinbase’s submission of a draft initial public offering (IPO) registration statement to the Securities and Exchange Commission (SEC).
With SPACs (so-called blank check companies, which allow other companies to go public through them), Bakkt avoids the usually lengthy process associated with IPOs-roadshows, issuance of prospectuses, the sale of shares to investors, etc.
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