Bitcoin Suisse plans an IPO to finance its future expansion. The firm’s main competitors also intend to raise capital in 2020. Competition in Switzerland’s crypto banking industry will gather steam this year.
Bitcoin Suisse plans to undergo an Initial Public Offering (IPO), according to a Finews report. The management wants to be prepared for a coming blockchain boom, aiming to raise enough financial firepower to grow the business over the next years.
CEO Niklas Nikolajsen says,“We have to think ahead over a couple of steps. And one of those steps means going public.” There is no exact timing yet for the IPO, but the management says it will be the next strategic step after the company has obtained a banking license and has conducted a capital increase. Both of these steps are planned for 2020.
IPO to finance growth and satisfy regulatory capital requirements
Today, Bitcoin Suisse has net assets of about 55 million francs, which the IPO should bring up to 100 million. Although the company is well-financed, the management sees a need for more capital. Nikolajsen says the current balance sheet is not sufficient to satisfy the demand for their services.
The company has grown rapidly over recent years. In 2019, it acquired a $3 million minority stake in trade intelligence firm CoinRoutes and opened a subsidiary in Liechtenstein. The firm today employs 122 staff and has generated a profit of 57 million francs in 2017 and 2018 combined.
The additional capital should further fuel this growth and also satisfy regulatory equity requirements for the firm’s crypto services. As Bitcoin Suisse wants to add more services, such as lending or trading services, capital requirements will further increase.
Increased competition in Switzerland’s crypto banking industry
Bitcoin Suisse’s main competitors, Seba Crypto, Crypto Finance, and Sygnum, are also looking at increasing their capital base. Seba Crypto announced to raise 100 million francs in the first half of 2020. Sygnum and Crypto Finance have also confirmed funding rounds in 2020, without providing further details. However, according to Finews’ estimates, all four companies will need about 250 million francs from investors in 2020.
This also means competition in Switzerland’s crypto banking industry will speed up this year. Seba Crypto and Sygnum already received a banking license. Crypto Finance Group and Bitcoin Suisse have filed their applications and expect to receive a license within this year.
STO may not attract sufficient investment
To the surprise of the local blockchain industry, Bitcoin Suisse wants to go the traditional route of financing via the stock market. The firm decided against blockchain-based fundraising via an ICO or STO.
STOs have a range of advantages over IPOs, such as lower costs, lower barriers to entry and increased financial inclusion. However, as the concept is still relatively new, investors have been slow in participating in these financing methods. As a result, many STOs have not hit their target volumes. As Bitcoin Suisse aims to raise $40 million, an STO may not yet be a suitable option.