Sequoia, partly managed by the billionaire, was acquired for $213.5 million (about $425 million). Sequoia set its stock price at zero on Wednesday. As if to confirm their concerns, FTX and FTX USA filed for bankruptcy on Friday.
Members of the three-person club and their businesses also lost other funds. FTX and FTX America have raised at least $2.2 billion since 2019 toward a combined valuation of $40 billion, according to Pitchbook, FTX funding round reports, and Bankman-Fried’s capital letters sent to Forbes in August this year. So at least 17 billionaires have been attracted to these ventures.
Changpeng Zhao (CZ), the founder and CEO of the world’s richest cryptocurrency exchange Binance, made the case for FTX’s collapse by raising concerns about its liquidity in a series of tweets earlier this week. contribute.
One of FTX’s first investors was also the company’s venture capital arm, Binance Labs, which participated in an $8 million seed round in August 2019. A day after CZ tweeted that Binance acquired FTX “due to corporate due diligence, and recent media reports of mismanagement of customer cash and alleged US government investigations,” Binance said it was pulling out of the deal.
The multi-billion-dollar fortunes of Sam Bankman-Fried and partner Gary Wang were wiped out this week when Bahamas-based FTX and its U.S. subsidiary FTX suddenly collapsed. It was gone within a few hours. Sequoia Capital, the largest outside investor in a bitcoin exchange, and its three billionaire partners didn’t spend more time documenting their interest in the business.
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Also, Binance Labs participated in FTX Series A investment in December 2019 for undisclosed terms. Additionally, two billionaire investors with recent betting records ran funds in this round.
Then, on January 26, 2022, FTX America, the US subsidiary of FTX, closed a separate financing round by raising $400 million at a valuation of $8 billion. At the same time, FTX secured an additional USD 400 million from more than 10 investors, with a company value of USD 32 billion. Sun Jizhen’s Softbank and Coleman’s Tiger Global increased their investment in FTX respectively. Alchemy Ventures, the investment arm of Alchemy, the unicorn blockchain technology venture co-founded and led by Nikil Viswanathan and Joe Lau, also increased its stake in FTX.
Lost a lot of money.
Don’t feel bad for these billionaires, though. They’re far better off than the FT’s staff, though: Bankman-Fried’s capitalization table to Forbes shows that the company’s stock options pool owns 3% of FTX, more than listed on the filing. any other external investors. That stake, worth $950 million after a January funding round, may now be worth nothing now that the FT has failed.