Amber Group – a cryptocurrency startup founded by former Morgan Stanley traders – has achieved unicorn status as investors pour in $ 100 million on a $ 1 billion valuation.
The Hong Kong-based company uses algorithmic trading, which is widely used by Wall Street firms that invest in stocks and indices to offset the massive volatility in the price of digital coins.
Amber provides a range of services, including trading and asset management, to institutional clients and retail investors, and makes money on loan and trading fees.
Although Bitcoin has plummeted 40 percent since April, Amber remains profitable and estimates it will generate $ 500 million in sales by the end of 2021. The final round of donations was led by China Renaissance and included investments from Tiger Global Management, DCM Ventures and Coinbase’s venture capital businesses.
“Both trading and financial services should be more technology-driven and automated,” said Michael Wu, CEO of Amber Group, in a press release. “The strategy we are pursuing with Amber is always quantitative.”
Wu – together with four colleagues from Morgan Stanley and a developer from Bloomberg LP – founded the Amber Group in 2018. The co-founder’s strategy was profitable from the start.
In early 2020, they raised $ 28 million on a valuation of $ 100 million. Since cryptocurrencies have been gaining ground and fluctuating sharply, the company has benefited from it.
Amber now has over 300 employees and $ 1.5 billion in capital that it trades, manages, and is even considering potential acquisitions to grow its presence. Still, the company recognizes the challenges ahead – especially those it faces through regulation.
“I think regulation is always a challenge for this industry as it is a very global industry,” added Wu. “It’s always about staying ahead or at least being aware of the different rules.”