Amber Group — a cryptocurrency startup created by ex-Morgan Stanley traders — has reached unicorn status as investors pour in $100 million at a $1 billion valuation.
The Hong Kong-based company uses algorithmic trading, commonly used by Wall Street firms investing in stocks and indexes, to arbitrage the massive price swings in digital coins.
Amber offers a suite of services to institutional clients and individual investors including trading and asset management and makes money from lending and trading fees.
Even as bitcoin has plummeted 40 percent since April, Amber remains profitable and estimates it will make $500 million in revenue by the end of 2021. The latest fundraising round was led by China Renaissance and included investments from Tiger Global Management, DCM Ventures, and Coinbase’s venture capital business.
“Both trading and financial services should be more tech driven and more automated,” Amber Group CEO Michael Wu said in a press release “The strategy we do with Amber is always quantitative.”
Wu — along with four colleagues from Morgan Stanley and a developer from Bloomberg LP — launched Amber Group in 2018. The co-founders’ strategy has been profitable since the beginning.
In early 2020, they raised $28 million at a $100 million valuation. Since then, as cryptocurrencies gain ground and fluctuate wildly, the company has capitalized on it.
Amber now has over 300 employees and $1.5 billion in capital it trades and manages and is even eyeing possible acquisitions to expand its presence. Still, the company recognizes the challenges ahead — specifically those it faces from regulation.
“I think regulation is always a challenge for this industry because it’s a very global industry,” Wu added. “It’s always about staying ahead, or at least staying aware of the different regulation.”