Coinbase IPO Could Command $28 Billion Valuation

Coinbase has filed a draft S-1 registration statement with the SEC confirming rumored plans to go public. Recently the company shuffled its board to include venture capitalist Marc Andreessen and Google veteran Gokul Rajaram along with former Cisco CFO Kelly Kramer in what appears to be final preparations for an offering that could see the company valued at $28 billion.

Below, we walk through a potential valuation for Coinbase using publicly available information. Subscribers can access the full model and edit with their own assumptions. We place all the sources of information in the model notes.

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Company Background

Coinbase is one of the most prominent cryptocurrency exchanges in the world. Launched in 2012 with a seed investment from Y Combinator, Coinbase has seen rapid growth with $220 million traded daily in 2019 to about $1 billion in volumes in Dec-20 (see “Volume” tab in the model). The company also custodies $25 billion of customer funds across 35 million customers. Based on past disclosures, we estimate they add around 13,000 retail customers a day.

While most of their trading volumes come from institutional investors, the majority of their customers are retail clients. We estimate the 2020E average trading volume per customer is approximately $6,000 and that currently, token-to-token trading accounts for only 10% of their total volume, with 90% against fiat.

Fundraising History