Crypto Startup Founded By Morgan Stanley Traders Is Now A Unicorn

Amber Group — a Hong Kong-based cryptocurrency trading firm founded by Morgan Stanley MS traders turned into a unicorn.

What Happened: According to a Monday Bloomberg report, Amber Group reached a valuation of $1 billion in 18 months since its 2018 founding after raising $100 million from investors, including DCM Ventures and Tiger Global Management.

This fundraising also included China Renaissance Group, Tiger Brokers, Gobi Partners, and already existing investors such as Coinbase Global Inc and Pantera Capital.

Why It Matters: Five out of six Amber Group founders worked at Morgan Stanley’s fixed-income trading floor in Hong Kong — namely Michael Wu, Tiantian Kullander, Wayne Huo, Tony He and Luke Li.

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The sixth founder is Thomas Zhu, a former Bloomberg LP developer working to explore machine learning for trading. The firm is largely tech-driven, and its Chief Executive officer Wu believes that this is the direction that the space should move in at large.

“Both trading and financial services should be more tech-driven and more automated. [...] The strategy we do with Amber is always quantitative," Wu said.

What Else: Amber Group has reportedly been profitable since day one and currently has a profit margin of over 60%, according to the firm's chief financial officer Kullander.

Read also: Morgan Stanley Co-Leads $48M Funding Round In Coinbase-Backed Securitize

He explained that the secret to its success is trading on volatility instead of the ups and downs of Bitcoin. The company generated about $60 million in revenue for the March quarter and approximately the same profit in April, as more customers joined it.