Binance’s hotly-anticipated Singapore crypto exchange is now live — and underwhelming

Binance, the company widely seen as the world’s largest crypto exchange, has officially set up shop in Singapore after it launched a service in the country.

The new Singapore service, however, bears more of a resemblance to U.S. rival Coinbase than a classic Binance exchange. Binance’s rapid ascent is thanks to a service that lets users trade a range of crypto tokens with very little verification or individual data required. It’s Singapore venture is quite the opposite: it allows customers to purchase Bitcoin only and at fixed prices. Initially, it appeared that purchased Bitcoin could not be moved out of the exchange at this point but that issue seems to be fixed now.

We checked in with Binance for more details, but the company is yet to respond.

Binance’s Singapore launch follows an investment from Vertex, a VC firm backed by Singapore’s sovereign fund Temasek, in October. Binance has been testing a ‘beta’ version of its service in the country since late 2018 in communication with Singaporean regulator MAS.

The company has prioritized creating fiat ramps — exchanges that allow customers to buy into crypto using currency — over the past six months as it seeks to gain increased legitimacy and play within regulated jurisdictions. CEO Changpeng Zhao has also stressed the importance of going beyond retail customers to reach institutional money and enable it to enter crypto. As a global financial hub, Singapore is its biggest effort on fiat to date.

The Singapore venture is Binance’s third fiat effort following exchanges in Uganda and Jersey — a joint-venture in Lichenstein is yet to launch — although it remains to be seen just how useful the Singapore offering will be in its current form.

Binance users have long been accustomed to a choice of a vast array of crypto assets on sale, but the Binance Singapore exchange falls short on that count, despite considerable expectation for its launch.

Interestingly, information on the website indicates that the new Binance venture appears to be a partnership with Xfers, a crypto startup in Southeast Asia that helped Coinbase set up its service in Singapore. Coinbase ended the partnership and quit the country last year claiming that Xfers was “not suitable in its current form to handle the growth” it had seen. Let’s see how Binance gets on.

The new Binance Singapore exchange is limited to Bitcoin only

Meanwhile, the company made another significant announcement after it officially launched its decentralized exchange, also known as Dex — its other major priority besides fiat.

There are no initial fireworks here — the Dex doesn’t yet include trading pairs or native tokens — but the launch means that blockchain companies are now able to migrate from Ethereum, EOS or other blockchains and begin to issue tokens on Binance Chain. A Binance spokesperson confirmed that the first of those migrations are expected to happen this week. The first is Binance’s own BNB token, which is moving from ERC20 to BEP2.

The Dex has been in testing since February, during which the company said that some 8.5 million transactions have been made. The real test will be when projects begin moving over and (if) traders begin to utilize the platform in large volumes going forward. Binance has always claimed that its Dex will operate as an alternative to its existing centralized exchanges, rather than as a replacement.

Binance draws revenue from over-the-counter (OTC) trading, trading fees on its platform and via BNB. Eventually, the Dex could augment that monetization as Binance will gain a share of network fees when its nodes are used in transactions on the Dex. Likewise, increased usage of the Dex and Binance Chain could raise the value of BNB — which has been on an incredible run this year, outpacing Bitcoin itself.

The value of Binance’s BNB token has quadrupled since the start of 2019, as data from Coinmarketcap.com shows

Valued at $6.02 on January 1, BNB broke $25 last week. Today, the price is $24.20, according to data from Coinmarketcap.com, and it remains to be seen how these two developments will impact it.

Note: The original version of this article has been updated to reflect that purchased Bitcoin can now be moved out of the Binance Singapore exchange.

The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

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Equity Shot: Pinterest zooms into the public markets (and yet another tech company files for an IPO)

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This is a relaxed, Friday, Equity Shot. That means Kate and Alex were on deck to chew through the latest from the IPO front. We’ll keep doing extra episodes as long as we have to, though we’re slightly sorry if we’re becoming a bit much.

That’s a joke, we’re not sorry at all.

So, three things this week. First, Fastly filed an S-1 (Alex’s notes here), second, Zoom completed its highly-anticipated IPO (Kate’s post here, Alex has notes too), third. Pinterest went public too (More from TechCrunch here). Ultimately, Pinterest’s stock offering valued the company at $12.6 billion (higher than its latest private valuation) but we’ve got some notes on the ‘undercorn’ phenomenon anyway (here and here).

Fastly is going public after raising more than $200 million at a valuation greater than $900 million. Founded in 2011, the content-delivery company surpassed the $100 million revenue mark in 2017, growing a little under 40 percent in 2018. It’s an unprofitable shop, but it has a clear path to profitability. And given how Zoom’s IPO went, it’s probably drafting a bit off of market momentum.

As mentioned, Zoom had a wildly successful first day of trading. The company ended up pricing its shares above range at $36 apiece only to debut on the Nasdaq at $65 apiece. Yes, that’s an 81 percent pop and yes, we were a bit floored.

Finally, Pinterest’s debut was solid, leading to a more than 25 percent gain over its above-range IPO price. What’s not to like about that? It’s hard to find fault with the offering. Pinterest got past the negative press and questions about private market valuations, went public, raised a truckload of money and now just has to execute. We’ll be watching.

If you’re looking for more Uber IPO content, don’t worry, there’s plenty more of that to come. See ya next week.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

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Equity Shot: Pinterest zooms into the public markets (and yet another tech company files for an IPO)

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This is a relaxed, Friday, Equity Shot. That means Kate and Alex were on deck to chew through the latest from the IPO front. We’ll keep doing extra episodes as long as we have to, though we’re slightly sorry if we’re becoming a bit much.

That’s a joke, we’re not sorry at all.

So, three things this week. First, Fastly filed an S-1 (Alex’s notes here), second, Zoom completed its highly-anticipated IPO (Kate’s post here, Alex has notes too), third. Pinterest went public too (More from TechCrunch here). Ultimately, Pinterest’s stock offering valued the company at $12.6 billion (higher than its latest private valuation) but we’ve got some notes on the ‘undercorn’ phenomenon anyway (here and here).

Fastly is going public after raising more than $200 million at a valuation greater than $900 million. Founded in 2011, the content-delivery company surpassed the $100 million revenue mark in 2017, growing a little under 40 percent in 2018. It’s an unprofitable shop, but it has a clear path to profitability. And given how Zoom’s IPO went, it’s probably drafting a bit off of market momentum.

As mentioned, Zoom had a wildly successful first day of trading. The company ended up pricing its shares above range at $36 apiece only to debut on the Nasdaq at $65 apiece. Yes, that’s an 81 percent pop and yes, we were a bit floored.

Finally, Pinterest’s debut was solid, leading to a more than 25 percent gain over its above-range IPO price. What’s not to like about that? It’s hard to find fault with the offering. Pinterest got past the negative press and questions about private market valuations, went public, raised a truckload of money and now just has to execute. We’ll be watching.

If you’re looking for more Uber IPO content, don’t worry, there’s plenty more of that to come. See ya next week.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast, Pocket Casts, Downcast and all the casts.

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Unpacking Pinterest’s IPO expectations

For seven years, Pinterest has been considered a “unicorn,” boasting a valuation larger than $1 billion since its 2012 Series C funding round. Before that, it was considered an underdog, puzzling some investors with its “digital pinboard” and preference for “quality growth.”

Now, as the company takes its final step toward its Thursday NYSE initial public offering, it’s being called an “undercorn.”

Pinterest plans to sell shares of its stock, titled “PINS,” at $15 to $17 apiece, less than the roughly $21 per share it charged private market investors to participate in its mid-2017 Series H, its last private financing. That IPO price translates into a mid-range valuation of $10.64 billion, or nearly $2 billion under the $12.3 billion valuation it garnered after its last round, hence “undercorn.”

There are many potential causes to a down round like this. In the case of Pinterest, it’s probably less a result of newly public Lyft’s poor performance on the stock market and more a result of its own reputation for slow growth. Pinterest is a disciplined company that’s carved a clear path to profitability. It has invested a lot of time and energy into building a positive, diverse culture and a product devoid of trolls and hate speech — time some believe should have been spent focused on rapid growth and scale.

Sure, if Pinterest had tossed its values aside and blitzscaled, maybe it would debut with a larger initial market cap, but its corporate culture will be key to its long-term value, and investors are going to get rich off its IPO either way. So Pinterest is an undercorn — who cares?

Pinterest isn’t too nice

Ben Silbermann, chief executive officer of Pinterest. Photographer: Yana Paskova/Bloomberg via Getty Images

Founded in 2010, Pinterest is one of the youngest members of the newly dubbed “A-PLUS” cohort of unicorns, made up of Airbnb, Pinterest, Lyft, Uber and Slack. Compared to its peers, Pinterest has raised a modest $1.47 billion in equity funding from Bessemer Venture Partners, which holds a 13.1 percent pre-IPO stake, FirstMark Capital (9.8 percent), Andreessen Horowitz (9.6 percent), Fidelity Investments (7.1 percent) and Valiant Capital Partners (6 percent), according to the company’s IPO filing.

Today, Pinterest counts more than 250 million monthly active users, despite a company culture that many have said has slowed progress. Co-founder and chief executive officer Ben Silbermann, as The New York Times pointed out in a recent profile, is not your typical unicorn CEO. He has refused to adopt the move fast and break things mentality, and shied away from the press and focused on “quality growth” and a supportive company culture.

Even with Pinterest’s new status as an undercorn, Bessemer still owns a stake worth upwards of $1 billion. At a midpoint price, FirstMark and a16z’s shares will be worth about $700 million each. Pinterest employees may be too nice to make decisions as quick as other unicorns, as is the claim in CNBC’s recent piece on the company, but the company wouldn’t be where it is today if it completely lacked a “strategic direction.”

“Being nice and having core values and making decisions with intent is to their overall benefit,” Eric Kim, the co-founder of consumer tech investment firm Goodwater Capital, told TechCrunch. “They’ve done an amazing job at being very disciplined with a focus on top lines.”

IPO prospects

More often than not, businesses accrue value at IPO. Look at Zoom, for example; the under-the-radar video conferencing business is expected to increase its valuation nine times over in its IPO, expected tomorrow.

It’s a disappointment to late-stage investors when the opposite happens for one obvious reason: They may not see a return on their investment. If Pinterest indeed becomes an undercorn next week, the new investors that participated in its Series H may have to hold on to their stock longer than planned in hopes its value climbs over time. That, right there, is the worst thing about being an undercorn. These titles are otherwise just nonsense.

Pinterest’s valuation has long radically exceeded its revenues — a factor that surely paved the way for a down round — yet it was touted as a tech marvel, a unicorn among unicorns. In recent years, its valuation has swelled from $4.75 billion in 2014 to $10.47 billion in 2015 to, finally, $12.3 billion in 2017. Meanwhile, Pinterest posted revenues of $299 million in 2016, $473 million in 2017 and $756 million in 2018. There’s no denying the company’s clear path to profitability, as its losses are shrinking year-over-year while profits grow, but 2018’s revenues are still 16 times less than Pinterest’s “decacorn” valuation.

Silicon Valley has a tendency to over-value unprofitable consumer-facing businesses; Pinterest’s down round IPO could be a sign of Wall Street’s reckoning with Silicon Valley’s vanity metrics. Pinterest, however, isn’t the first unicorn to take a hit to its valuation at IPO. Both Box, the cloud-based content management platform, and payments company Square were undercorns when they went public, for example. Square has since thrived as a public company, while Box is currently trading around its initial share price.

“The recovery is all about execution as a public company when everything is much more transparent,” Monique Skruzny, CEO of InspIR Group, an advisory firm focused on investor relations, told TechCrunch. “The IPO is the beginning of a company’s long-term relationship with the public markets and the public markets have to make money. Going public at a valuation that may not necessarily be what some might think or consider to be the top leaves room for upside going forward.”

For Pinterest, continuing to cut losses and surpassing $1 billion in revenue this year is key. Given its history, financial metrics and the generally favorable market conditions, it looks poised to make that happen.

The bottom line is Pinterest, given its slow growth and inflated valuation, was probably always doomed to be nicknamed an undercorn. Its culture, however, shouldn’t be to blame for its new status. After all, a $10 billion IPO is something for the tech industry to be proud of, not to criticize.

In the words of former investor and Evernote co-founder Phil Libin, who joined me on the Equity podcast last week to talk IPOs: “Who would criticize a company who sacrifices growth because they have important culture? Losers, honestly.”

“If they didn’t have the culture and the people they wouldn’t have made anything,” he added.

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Proof of Capital is a new $50M blockchain fund that’s backed by HTC

It’s often said that the dramatic fall of crypto prices last year ushered in a new era for technology-focused startups in the blockchain space, and the same argument can be made for the venture capitalists who fund them. Proof of Capital is the latest fund to emerge after it officially announced a maiden $50 million fund today.

The fund is led by trio Phil Chen, who created HTC’s Vive VR headset and is currently developing its Exodus blockchain phone (he spent time as a VC with Horizons Ventures in between), Edith Yeung, who previously headed up mobile for 500 Startups, and Chris McCann, a Thiel Fellow whose last role was head of community for U.S. VC firm Greylock Partners.

The firm — and you have to give them credit for the name — has an LP base that is anchored by HTC — no big surprise there given the connections — alongside YouTube co-founder Steve Chen, Taiwan-based Formosa Plastics, Ripple’s former chief risk officer Greg Kidd (who is also a prolific crypto investor) and a number of undisclosed family offices.

“For HTC, it’s obvious, they already have a product to go with it,” Yeung told TechCrunch in an interview, referencing the fact that HTC is keen to invest in blockchain services and startups to build an ecosystem for its play.

The fund also includes a partnership with HTC which, slightly hazy on paper, will essentially open the possibility for Proof of Capital portfolio companies to work with HTC directly to develop services or products for Exodus and potentially other HTC blockchain ventures. But other LPs are also keen to dip their toes in the water in different ways.

“Some of these backers are curious at the possibilities of blockchain,” continued Yeung. “For example, they’re giving us some ideas on how tokenization and gamification could be applied on different platforms.”

Proof of Capital founding partners (left to right) Edith Yeung, Chris McCann and Phil Chen

The fund itself is broadly targeted at early stage blockchain companies in fintech, infrastructure, hardware and the “consumer layers of the blockchain ecosystem.” Its remit is worldwide. Although Chen and Yeung have strong networks in Asia, the fund’s first deal is an investment in Latin America-based blockchain fintech startup Ubanx.

Yeung clarified that the fund is held in fiat currency and that it is focused on regular VC deals, as opposed to token-based investments.

“It’s a VC fund so the setup is traditional,” she explained. “There’s been a lot of interesting movements in the last two years, [but] we come from a more traditional VC background and are excited about the technology.”

“It’s still really early [for blockchain] and a lot of the hype — the boom and bust — is down to the crypto market and ICOs, but the reality is that a lot of these technologies are really nascent. Now, projects are raising equity, even if they have a token,” Yeung added.

Indeed, last year we wrote about the rise of private sales and that even the biggest blockchain companies took on VC fundingcrypto didn’t kill VCs despite the hype — and Yeung said that blockchain startup founders in 2019 are “taking a more concerted approach” to raising money beyond simply issuing tokens.

“Many projects that raised ICO really smelt like equity,” said Yeung. “We are seeing companies today delaying token issuance as much as possible; the whole thing has gone a little more back to earth.”

HTC is an anchor LP in Proof of Capital, and it is working with the fund to help its portfolio companies develop services for its Exodus blockchain phone, pictured above

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