Westpac Bank Set To Make $300 Million from Coinbase Public Listing

Friday 16 April 2021, 5:00 PM AEST - 3 weeks ago

As reported by the SMH, Australian Westpac bank’s venture capital fund Reinventure is set to make an estimated $300 million AUD profit from a Coinbase investment they made back in 2015.

Pictured above Reinventure’s Simon Cant, Danny Gilligan and Rohen Sood – source

The Sydney based company Reinventure, was seeded by Westpac with an additional $50 million in late 2014, with the purpose of investing in start-ups. In a statement with Financial Review earlier this year, Reinventure Group co-founder Danny Gilligan mentioned rumours that the fund had increased by nine times.

“We can’t comment on the secondary trading as it’s under NDA [non-disclosure agreement],” Mr Gilligan said. “But if those rumoured prices are true, then Fund 1 is currently nine times the original fund.”

Danny Gilligan – Reinventure Group co-founder

If the rumours are true this would made the fund worth $450 million today, one of the best-performing funds in the history of Australian venture capital?

The 10 start-ups backed by the Reinventure fund included:

  • SocietyOne – Peer-to-peer lending platform
  • Coinbase – Cryptocurrency exchange
  • Nabo – Social media platform (sold)
  • Zetaris – Big data (sold)
  • Hey You – Australian dining out app
  • Auror – Crime software
  • Data Republic – Data safety
  • Flare – HR cloud platform
  • Valiant – Business loans

Coinbase Goes Public

On April 15th, Coinbase (COIN) was listed on the New York Stock Market (Nasdaq). The exchange is one of the largest cryptocurrency exchanges in the world with an estimated 56 million users worldwide.

The exchange recently reported massive quarterly profits for Q1 2021 with a net income of $800 million USD, which led to a suggested massive $100 billion evaluation.

“With Coinbase, the appeal was it was like selling picks and shovels at a gold rush, rather than taking a view on bitcoin. And Coinbase seemed to have a very robust business for providing the tools for people who wanted to use bitcoin. That seemed like a fairly sensible and relatively low-risk bet”

Former Westpac CEO Brian Hartzer

DeFi is the “cutting edge” of Finance

Decentralised Finance (DeFi) is hot right now, with a growing number of start-ups entering the space. We have seen DeFi traders making millions, Mark Cuban calling DeFi the start of personal banking and a lot of DeFi funds get hacked since it the new internet technology emerged in mid 2020.

“DeFi is re-engineering the fundamentals of finance from the ground up,” Mr Cant said. “It still has a way to go before it starts to be used in a scaled way for real financial applications, but in the meantime, problems around scaling are being worked through and we are particularly bullish on the potential for decentralised finance infrastructure, data and the continued thematic of finance at the edge”.

Simon Cant – Reinventure Group co-founder

Fintech seems popular with VC’s right now as we saw earlier this year Australian DeFi company Synthetix raise $12 million, and just recently Australian Mark Carnegie setting up a DeFi crypto fund.

Will we see more Australian investors seed capital into the DeFi technology start-ups this year?

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