Kraken is one of the top-performing CEXs (centralized exchanges) in the world. This massively popular trading platform enables new and experienced users to buy, sell, and trade +185 cryptocurrencies across 7 fiat currencies. Since its launch, Kraken has pioneered efforts to drive mainstream adoption. As such, demand for Kraken stocks remains high.
While Kraken hasn’t officially announced plans to go public, it has been rumored that its executives are considering the decision. If Kraken did announce plans to host an IPO, most analysts agree that it would be met with strong investor support. The company has a proven track record, innovative features, and educational aspects that add to its value.
Currently, Kraken remains private, meaning you would need to acquire pre-IPO shares to hold Kraken stock. Here is how you can get your hands on some pre-IPO Kraken shares.
What is Kraken?
Kraken was first introduced in 2011 by founder Jesse Powell. In September 2013, Kraken officially launched out of San Francisco. Its goal was to provide users with secure and easy Bitcoin and Litecoin trading options. Shortly after its launch, the exchange began to add other popular cryptocurrencies such as Ethereum.
In 2021, Kraken expanded its operations further with its mobile trading app. This mobile solution helped propel the CEX into the spotlight. The mobile app and desktop platform included features still new to the crypto market, such as margin trading, staking, advanced ordering, and more.
The mobile app streamlined access and simplified the onboarding process, driving user numbers above +10M. Since then, the CEX has continued its pioneering efforts, including the introduction of its in-house wallet that serves 8 popular blockchain networks. The wallet allows users to seamlessly leverage their digital assets across the Kraken ecosystem, enabling users to generate revenue from the security of their wallet.
This year, the Kraken NFT (non-fungible token) marketplace officially opened. Notably, users can create, trade, review, and collect digital assets directly using their Kraken wallet via the NFT marketplace, further enhancing security and reducing technical barriers. Kraken’s decision to support NFT trading was a smart pivot as the NFT market remains a fast-growing sector.
Historical Funding Rounds
Summary of Kraken Funding:
- Total Funding: Kraken secured $32.5M across 6 funding rounds
- Largest Round: Kraken’s largest funding round was a Series C that secured $14M on May 13, 2020.
- Investors: A total of 104 institutional investors back Kraken
- Latest Round: The latest funding round raised $5M and was a Series A round held on Mar 25, 2014.
Funding Rounds Breakdown:
- 3 early stage
- 3 late-stage
Key Investors:
Kraken has backing from prominent investors, including RIT Capital Partners, MoneyPartners Group, SBI Group, Hummingbird Ventures, Evolution VC Partners, ADS Ventures, and many more.
Funding Data Sourced from Tracxn
Why Invest in Kraken?
The main reason for investing in Kraken is that it’s a global leader in the competitive CEX market. The firm currently ranks 4th among +3700 competitors, according to Traxn. This dominant position was earned through a combination of providing stability, security, and ease of use.
Kraken has international notoriety and services available in 190 countries. The exchange lists $207B in quarterly trading volume and has recently made a pivot towards institutional clientele with the opening of Kraken Institutional, which focuses on helping big businesses enter the digital asset economy.
Kraken Smart Acquisitions
Another key point that investors shouldn’t neglect is that the Kraken management team is an expert at acquiring firms to expand their operations. For example, in 2016, Kraken purchased NY-based exchanges Coinsetter and Cavirtex. A year later, the exchange acquired a charting software platform called Cryptowatch. In 2019, the firm entered the derivatives trading market with the acquisition of the British exchange Crypto facilities.
Each acquisition strengthened the exchange’s market positioning and improved consumer confidence. In 2023, the company acquired a Virtual Asset Service Provider license in Spain, Italy, and Ireland, expanding its EU operations and opening the door for more Euro trading activity.
Kraken Security
Kraken provides enterprise-level security to its users. As part of this approach, the company earned an ISO/IEC 27001:2013 certification, demonstrating the platform’s commitment to upholding international security standards. Additionally, it’s never been successfully hacked, adding to its reputation as a reliable trading option.
Interestingly, it was the Kraken Exchange team that figured out who had hacked the FTX exchange, which resulted in billions in losses. It turned out the hacker moved some of the funds from a Kraken wallet to the same wallet in which he stored the stolen FTX funds, allowing investigators to reveal his identity.
Kraken Transparency
Kraken provides a high level of transparency to the market. The company has a proof of reserves protocol that utilizes third-party auditors to inform the community about the true state of the Exchange’s reserves. Additionally, it has built many vital partnerships with dominant banking institutions as part of its regulatory-friendly approach.
How to Buy Kraken Pre-IPO Shares
The hope remains high that Kraken will go public after a few more private funding rounds. However, no exact date has been given. As such, Kraken remains a privately held company, meaning that you will need to utilize a specialized approach to get access to shares. Here is what you need to consider.
1. Pre-IPO Secondary Marketplace
Secondary markets are purpose-built exchanges that connect pre-IPO shareholders with potential investors. These marketplaces can offer these assets because they work closely with employees, early-stage investors, and venture capitalists, which are crucial to the company’s pre-IPO growth.
Investing in pre-IPO shares for Kraken could open the door for additional ROIs if the company’s valuation is less than when its IPO launches. It’s common for company valuations to increase following an IPO. As such, it makes sense to add pre-IPO shares to your portfolio before the firm announces plans to go public.
Secondary marketplaces have many requirements. Here are some concerns you should be made aware of:
Eligibility: Notably, this approach requires you to be an accredited investor, meaning you will have to show at least $1M in liquid assets to qualify.
Liquidity: Pre-IPO shares can’t be traded like regular shares. They often include some lockup restrictions that prevent you from trading them before the IPO. Some firms have permanent “no sell” clauses that prevent any transfer of the shares following your investment.
Linqto is a reputable investment platform that connects accredited investors with pre-IPO shareholders in a secure manner. The network streamlines pre-IPO investing via an easy-to-navigate interface that provides access to all relevant data at a glance. Accredited investors seeking pre-IPO shares in Kraken should consider Linqto.
Visit Linqto →
2. Private Equity Firms
Private equity firms gain access to pre-IPO shares during investment rounds. They then offer these shares to high-net-worth accredited investors with a commission. Notably, private equity firms are known to have extra stipulations, including blocking the sale of shares for years in some cases.
3. Employee Equity Sales
Many consider employee equity sales as the best way to acquire pre-IPO shares in Kraken. This method of acquiring pre-IPO shares requires you to connect with former employees. It’s common for companies to issue shares as part of an incentive package. Notably, this profit-sharing method has become more popular, leading to more pre-IPO share opportunities for investors.
Private Transactions: there are a lot of hoops you will need to jump through to complete a private pre-IPO transaction, including creating specific legal agreements, conducting valuations, and setting in place any limitations on the transfer of the asset.
Brokerage: Brokers will take a lot of the confusion out of the pre-IPO process. These professionals can guide you through each step, ensuring full compliance and avoiding common errors untrained professionals make.
There are several risks that you should consider before jumping into the pre-IPO shares investment arena. Here are the top concerns:
Liquidity Risk
If you are looking for an asset that you can sell right away, pre-IPO shares are not the best option. These investments can include sales and transfer clauses that prevent the transfer of the asset until certain criteria, such as the IPO’s completion. It’s even common for pre-IPO shares to require you to wait years before gaining the ability to sell your assets.
Regulatory Risk of Investing in Kraken Pre-IPO Shares
The blockchain market has seen considerable scrutiny from regulators and lawmakers. While the technology is far better understood than in its early days, there are still many lawmakers who see it as a threat to the traditional financial system. As such, you need to always consider how new regulations could affect the value of your pre-IPO shares.
Market Risk
Purchasing pre-IPO shares in Kraken means that you stand behind the project and its team. The company has secured a reputation for excellence and has previously expressed a desire to go public. However, no concrete data has been provided yet. As such, it’s vital to understand that the blockchain market is an active space that experiences strong fluctuations that could result in a different share value between now and any future IPO launch.
Valuation of Kraken and Future IPO
Kraken earned a valuation of $10B in 2023. The company secured this valuation due to its regulatory-friendly approach, high-security standards, and easy-to-navigate mobile app that includes a plethora of DeFi options. All of these factors have helped Kraken become a go-to exchange for business and personal users.
In June 2024, it was reported in Bloomberg that Kraken wanted to secure +100M in funding before it would announce an IPO date, which many expect to be in 2025. If Kraken did move forward with its plans to secure another $100M and then host an IPO, the investor community would support the maneuver.
Kraken is a top-performing CEX in a very competitive marketplace. The company has consistently ranked among the top 10 in this sector for a decade, cementing its position as a secure and reliable trading option for business, governments, and personal use. Its IPO would reflect its dominant position and open the door for future growth.
Investing in Pre-IPO Kraken Stocks Conclusion
Those seeking to invest in pre-IPO shares of Kraken could gain upside exposure. Kraken’s ecosystem spans the digital asset industry including support for institutional investors, NFT collectors, crypto traders, and DeFi users. This flexibility, coupled with its strong partnerships, and regulatory certifications, make Kraken a smart addition to most people’s portfolios.
Before investing in pre-IPO shares of Kraken, you must conduct an in-depth financial analysis of the exchange. Investing in pre-IPO shares carries extra risks that don’t exist in a traditional IPO investment scenario, such as lockup periods. Always consult a financial expert before making any pre-IPO stock purchases to ensure that you remain within your risk appetite. For traders who have done their homework and are ready to secure Kraken Pre-IPO shares, there is a lot of upside potential here.
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Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Pre-IPO shares are typically available only to accredited investors and carry significant risk. Always perform thorough due diligence and consult a financial advisor or legal expert before making investment decisions.
