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Understanding ‘Series A’ Funding Round Commonly Opted By Startup Crypto Exchanges

Startup crypto exchanges seem to largely benefit from a “Series A” funding round, as it helps in raising a substantial amount of funds for the overall business development of the firm. In general, funding rounds provide outside investors the opportunity to invest their capital in a growing company in exchange for partial ownership or equity of that company. Series A, B and C funding rounds refer to the process of developing a business through external investment.

Depending upon the industry and the level of interest among potential investors, there are other types of funding rounds available for startups. It is common for startups to also engage in “seed funding” at the outset. As the business starts gaining maturity, it is common for a startup to advance through Series A, B and C funding rounds.

A Singapore-based crypto exchange KuCoin has recently announced that it has raised $20 million as part of its “Series A” funding round from Matrix Partners, IDG Capital and Neo Global Capital. The exchange intends to utilize the funds that it raised via “Series A” funding to launch its KuCoin platform version 2.0. The platform will include new features such as stop orders, upgraded APIs and a dust collecting tool that will presumably allow users to trade small amounts for KCS, the KuCoin token, as reported on CryptoGlobe.

It is common for analysts to undertake a valuation of the company in question before any round of funding begins. These valuations are derived from several factors such as a proven track record, market size, management and risk. The key distinction between funding rounds A, B and C has to do with the maturity level, growth prospects and valuation of the business. These factors influence the types of investors who are likely to get involved and also the reasons as to why the company is seeking new capital.

Series A Funding

A company or a startup exchange may opt for “Series A” funding, once the business has developed a track record comprising of an established user base, some other key performance indicator or consistent revenue figures. With the help of a “Series A” funding round, the company plans to optimize its user base and product offerings, as reported on Investopedia.

Investors do not just look for great ideas in a “Series A” funding round. Instead, they are looking at startup crypto exchanges or companies for that matter, with great ideas as well as a robust strategy for turning that idea into a successful money-making business. Thus it is common for firms going through “Series A” funding round to be valued approximately up to $15 million.

[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]
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Jesmine Rahman holds 15+ years of professional writing experience of working with reputed Indian dailies like the Times of India and the Indian Express. She also holds a rich experience of working as a Senior Technical Content Specialist with a reputed IT company. for 10 years. She writes crypto news on OWLT Market.

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