The recent $ 5,6 million capital injection into New York-based AlphaPoint comes from bridging, a short-term commercial loan, the company said. But AlphaPoint has no intention of revealing who made the loan or its terms.
Bridge financing is often used to cover financial gaps. ”We can say that it was driven by a new one investor whose identity we cannot disclose with the participation of known investors, including Galaxy, ”said Patrick Shields, AlphaPoint's head of marketing.
Who is Alphapoint
AlphaPoint, a company that provides software for trading digital assets to cryptocurrency exchanges in various local markets, raised funds of up to $ 15 million in June 2018, led by Galaxy Digital.
Half of that amount was subsequently transferred to "a Galaxy managed fund" in the last quarter of 2018. Galaxy then made a $ 3,1 million write-down in its third quarter 2019 balance sheet, stating that "this was mainly due to the fact that the company's performance was lower than expected. "
AlphaPoint's core business depends on the volume of cryptocurrency exchanges, as its revenue model is based on the top-up of customers, mainly small exchanges, monthly licenses and a percentage of trading commissions.
The volume of consolidated exchanges such as Bitstamp has decreased compared to the end of 2019 and, in the recovery phase, has not seen the same levels since last summer.Moreover, many of AlphaPoint's top customers have gone out of business.
Meanwhile, new trading sources, such as crypto derivative platforms, over-the-counter (OTC) branches, stock exchanges and decentralized exchanges (DEX) are growing in the main AlphaPoint market.
Looking at the future
The latest round of debt financing comes after Binance announces its solution for potential cryptocurrency exchange entrepreneurs. Called Binance Cloud, it allows local operators to use the company's software and access its liquidity.
AlphaPoint CEO Igor Telyatnikov says that "the main competitor is typically the personalized exchange." As all cryptocurrency exchanges carry out relentless research to add features and functions that attract traders, AlphaPoint is pushing its platform into the areas its customers need to remain competitive.
"The main matching engine, order management and order gateways are all in a system with different configurations depending on how customers want to implement and use it," he noted.
AlphaPoint said it served over one million end users and enabled 100 million annual transactions. Telyatnikov also stated that "The main goal for us is to develop and implement liquidity, leverage and loan solutions," said Telyatnikov.
In addition to funding, Alphapoint has also improved supervision by adding a new board member and consultant: Tim Scheve, president and CEO of FINRA (Financial Industry Regulatory Authority), and Jan Mayle, CEO and founder of the consulting firm The Mayle Group.
