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Here's How Much Coinbase Early Investors Made From The Largest Direct Listing In History

April 15, 2021 10:54 am
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Here's How Much Coinbase Early Investors Made From The Largest Direct Listing In History

What Happened: Coinbase Global Inc (NASDAQ:COIN) closed its first day of trading as a public company at a valuation of $85.7 billion.

The crypto exchange’s massive valuation eclipsed all other direct listings, including Roblox Corp (NYSE:RBLX), Spotify Technology SA (NYSE:SPOT), and Palantir Technologies Inc (NYSE:PLTR), becoming the largest direct listing to date.

Why It Matters: While this was surely a monumental moment for the entire crypto industry, the company, which was launched out of a two-bedroom apartment, is an all-around success story.  

Apart from Coinbase’s founders and internal stakeholders, the key beneficiaries of this success story were the company’s earliest investors, with some making 8000 times their initial investment.

Garry Tan, the founder of Initialized Capital, invested $300,000 in Coinbase in early 2013 for a price of $0.15 per share. That investment is now worth $2.4 billion, and Tan describes it as his “best startup investment yet.”

Fred Wilson’s Union Square Ventures invested in the crypto exchange at a price of $0.20 per share, turning their $5 million initial investment to around $12 billion, assuming they did not sell any shares along the way.

See also: How to Buy Coinbase IPO (COIN) Stock

Venture firm Andreessen Horowitz, or a16z, invested in Coinbase at $1.00 per share. Their return from this one investment surpassed all their other funds combined.

What Else: Coinbase’s success was largely dependent on a broader acceptance of cryptocurrency.

According to co-founder Fred Ehrsam, the road wasn’t always clear.

“There was serious hardship. In the 3 years between 2014 and 2017, the outside world thought crypto was dead. Over a third of employees left,” he said on Twitter.

The exchange’s successful listing has now paved the way for more crypto exchanges to follow.

“Coinbase’s IPO will be a reference for Crypto.com’s own valuation as the first publicly traded comparable,” said crypto exchange Crypto.com in a statement.

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