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For a three-year-old, FTX is certainly precocious. The crypto derivatives company raised $400 million in funding Monday, vaulting its valuation beyond that of the Nasdaq's, to $32 billion.

Why it matters: Now one of the largest crypto exchanges in the world, FTX has made acquisitions a key part of its strategy. The funding war-chest gives the company ammo to do so—and the ability to stay private for longer.

FTX CEO Sam Bankman-Fried tells Lucinda he estimates the company and affiliate FTX.US will make over $500 million of acquisitions in the next nine months or so. 

That comes after the $150 million acquisition of Blockfolio and estimated $500 million acquisition of LedgerX, per Axios' Dan Primack.

Context: The general trend, putting aside some pandemic-related examples of quick public floats, is that venture capital-backed startups are more comfortable putting off going public, concerned that a hyper-focus on profits and added regulatory scrutiny derails growth and innovation. 

FTX is no different. When asked about the possibility of an IPO, Bankman-Fried said: "We're not racing to go public. But we're looking at the potential, and I want to be moderately prepared for an IPO, and when it seems like it would be correct pull that trigger... but I also think it's possible that it ends up never being correct, too."

 Yes, but: FTX staying private forever at such a high valuation would be an exception rather than the rule for a venture-backed business. As of this year, just two of the 2016 decacorn-plus class remain private: Flipkart (which intends to file for an IPO) and SpaceX. 

Investors in the company eventually want liquid returns on their shares. Even big data company Palantir finally went public in 2020, after 17 years as a private entity.

Bankman-Fried said if the company does stay private forever, he'd surely explore ways to repay the company's investors, through dividends of some type or by buying back shares. 

Financial news giant Bloomberg remains private after over 40 years, with Michael Bloomberg reportedly buying back Merrill Lynch's 20% stake in the business for about $4.5 billion during the 2008 financial crisis. 

Bottom line: Nothing is set in stone, and FTX's next fundraise is likely to be a private one rather than a public listing, says Bankman-Fried.

The big picture: As bankers and public market players come up with new ways of going public via SPACs and direct listings, startup founders are are also thinking up innovative ways of staying private longer—potentially forever. 

1 big thing: FTX and the never-IPO

FTX CEO Sam Bankman Fried.  Lam Yik/Bloomberg via Getty Images

FTX CEO Sam Bankman-Fried.  Photo: Lam Yik/Bloomberg via Getty Images

Binance, the world's largest cryptocurrency exchange by trading volume, has saved up $1 billion in insurance funds to protect users against fraud, the company announced.

Why it's a BFD: At a time when crypto hacks are all over the news, Binance wants to provide its users with a little extra peace of mind.

Earlier this month, Crypto.com customer accounts were hit with about $34 million in unauthorized withdrawals. And, just last week, hackers managed to grab more than $80 million of digital assets from a blockchain extension created by Qubit Finance. 

Details: The Secure Asset Fund for Users was established by Binance in 2018, at which time the company began allocating 10% of all trading fees on its platform to provide insurance against hacks and breaches.

The value of the fund fluctuates, depending on the market, but as of market open on Jan. 29, it had surpassed $1 billion in holdings.

2. The BFD: Binance's $1B insurance fund

Illustration of dollar bills sticking out of a vault door.

Coinbase, the U.S.-based crypto exchange, is adding Tobi Lütke, co-founder and CEO of e-commerce giant Shopify, to its board of directors, Axios' Kia Kokalitcheva writes.

Why it matters: Adding Lütke is another step forward for Coinbase as it seeks to make crypto more than just asset with volatile ups and downs.

Coinbase partnered with Shopify starting in 2014 to offer crypto payments to its shop owners.

The big picture: The road goes both ways. Companies in the crypto space have been adding those with expertise in more traditional companies, while companies with weaker crypto experience have also been plugging those holes.

3. Coinbase adds Shopify's CEO to the board

Illustration of golden coins with the Coinbase logo on them

The now hot thing in crypto — the DAO (the New Yorker) 

So-called Decentralized Autonomous Organizations have a pockmarked history. In 2016, an organization dubbed The DAO launched with some $150 million in ethereum — only for hackers to take off with about a third of the funds. Last year, this concept of creating a group by pooling tokens and allowing the funders to vote with their capital, took off, with bulls hoping it could compete with venture capital firms and entertainment funding vehicles in the future. The question: Will the trend last?

More than 80% of NFTs created for free on OpenSea are fraud or spam, company says (Vice)

OpenSea said on Thursday it would limit how many times a user could mint an NFT for free on the platform using its tools, but shortly after reversed course. In a Tweet thread justifying the now-reversed measures, it admitted that over "80% of the items created with this tool were plagiarized works, fake collections, and spam."

Economist Paul Krugman writes that crypto resembles the "subprime crash" (The New York Times)

Observing the recent crypto wipeout, Nobel Prize-winning economist Paul Krugman opines that the crash falls disproportionately on the vulnerable, echoing the 2008 financial crisis. "According to a survey by the research organization NORC, 44 percent of crypto investors are nonwhite, and 55 percent don’t have a college degree," he writes. One important distinction: Krugman does not see crypto's fallout as a systemic issue for the economy, compared to subprime in 2008. 

From Better.com to better run (TechCrunch)

Mortgage lender Better.com CEO Vishal Garg is back at the helm after disastrously laying off some 900 people over Zoom. But after press leaks late last year, he's taken severe measures, TechCrunch's Mary Ann Azevedo reports. Better has had employees sign NDAs, place phones in paper bags, and pass through metal detectors to suss out recording devices.

4. Credit score

Illustration of a crypto coin pixelating and gradually disappearing

Generation Home, a U.K. mortgage lending startup, raised £1b in debt financing from Waterfall Asset Management. The funding will be partly financed by Barclays. http://axios.link/PTnU 

Dealshare, a Bengaluru-based social commerce startup, raised $165m in funding led by Tiger Global and Alpha Wave Global at a $1.6b valuation. Dragoneer Investments Group, Kora Capital, and Unilever Ventures also participated. http://axios.link/ALQM

Pennylane, a French accounting software startup, raised €50m in Series B funding led by Sequoia Capital, with participation from Global Founders Capital and Partech. http://axios.link/cM02

Brimore, an Egyptian social commerce startup, raised $25m in Series A funding. IFC and Endure Capital co-led, and were joined by Fawry, Flourish, Endeavor Catalyst Fund, Algebra Ventures, Disruptech and Vision Ventures. http://axios.link/1Hfi 

Qlub, a French payments provider for restaurants, raised $17m in seed funding co-led by Cherry Ventures and Point Nine Capital. Also participating were other VCs including STV, Raed Ventures, Heartcore, Shorooq Partners, and FinTech Collective. http://axios.link/4p5i

Bamboo, a Nigerian investment app, raised $15m in Series A funding. Greycroft and Tiger Global co-led, and were joined by Motley Fool Ventures, Saison Capital, Chrysalis Capital and Michael Seibel. http://axios.link/toOl 

Ayoconnect, an Indonesia-based financial API platform, raised $15m in Series B funding led by Tiger Global. Other investors include PayU, Alto Partners, Plaid co-founder William Hockey and Bank Jago president-commissioner Jerry Ng. http://axios.link/0qef 

Circula, a Berlin-based expense management startup, raised €12m in Series A from Alstin Capital, Peak, and Storm Ventures. http://axios.link/VtM8

Unblocked, a Los Angeles-based NFT startup, raised $10m in seed funding at a $90m valuation. Investors include Tiger Global, Penske Media Corp, Electric Feel Entertainment, Primary Wave Music, and Dapper Labs. onunblocked.com

Bizi, an Israeli SMB financing startup, raised $7.5m in Seed funding led by BlueVine, along with Phoenix and Orshay. http://axios.link/wmD5

Helvengo, a Swiss-based insurtech startup, raised over €4m in seed funding led by TX Ventures, along with Hypoport, PostFinance, Seed X Liechtenstein, Anamcara Capital, Plug and Play, Conny&Co, and various angels. http://axios.link/PkMJ 

5. Deals of the day

N26 chief operating officer Adrienne Gormley will be leaving the company in April. Chief financial officer Jan Kemper will take on the roles of both COO and CFO. http://axios.link/DxkG

6. It's personnel

🙏Thanks for reading Axios Pro Fintech! If you're not a subscriber and you've made it this far, you should sign up today. 

7. Memes and mumbles

https://twitter.com/edwinwee/status/1487925243528110081

Good morning, Fintech Deals readers! We hope you had a pleasant weekend.

January 31, 2022

1 big thing: FTX and the never-IPO