Cryptocurrencies have become a mainstream investment vehicle despite regulatory uncertainties in some parts of the world. The entire market is now worth several trillion dollars and gradually expanding as mainstream adoption grows and institutional investors pour capital into promising ventures. Each day, more venture capitalists are joining the crypto market despite Bitcoin suffering significant price drops.
The main reason why crypto markets and related projects are seeing an uptick in investments is that blockchain technology and companies around it are developing at an astonishing speed. One such company is Amber Group whose aim is to allow companies and individuals to enter the digital finance scene.
CEO and co-founder of Amber Group, Michael Wu stated “We want to help create a digital future where digital assets empower people with the opportunity and agency to shape a better world for all and we proud to have the support of our investors who not only share this vision but also put their capital and trust in us to achieve it.”
Amber Group is an all-in-one crypto finance platform that brings e-wallets, payment providers, exchanges, and other blockchain-enabled tools and technologies under one roof. Through the support of its partners and the function of its APIs, Amber Group offers integrated solutions and products to enable digitization, tokenization, custody, settlement, trading, payment, and even wallet management within an organization.
Michael Wu, Tiantian Kullander, Thomas Zhu, and Wayne Huo founded Amber in 2015, they wanted to create a platform where institutional, as well as commercial investors, can invest in crypto safely. What started as a side project is now backed by thousands of institutional investors and has accumulated more than a trillion dollars in total traded volume.
The company has recently achieved unicorn status after raising $300 million as Series B funding. The founders believe that a 24/7 crypto finance service provider such as Amber Group is what every investor needs right now. Let’s take a look at how Amber Group, a Shenzhen-based, Chinese crypto company originated and what is the real reason for its unprecedented success?
Right now, Amber Group is a team of more than 750 individuals including several entrepreneurs, technologists, expert traders, and even engineers who collaborate to make their platform a seamless marketplace for all investors associated with it. The brains behind this project are ex-traders at Morgan Stanley and one former Bloomberg LP developer. The team hired another one of their former colleague from Morgan Stanley Asia, Jeffrey Wang.
It all started with Michael Wu, the co-founder and current CEO of Amber Group who used to be a quantitative analyst at Goldman Sachs and also a macro trader at Morgan Stanley. Wu obtained experience in portfolio management while working at a billion-dollar hedge fund and is an honoured 2019’s Forbes 30 Under 30 Asia personality.
As a person with a finance background, Wu completed degrees from Dartmouth College and the University of Oxford. While working at Goldman Sachs, he was exposed to the complexities of today’s financial systems which according to him were constraining and inefficient. Wu always kept a keen interest in emerging technologies, especially ones that could revolutionize the financial system. It did not take him long to be inspired by crypto and the concept of DeFi.
The next thing for Wu was to find a way to combine financial innovations in a way that bridges the gap between crypto markets and the traditional finance industry. Along the way, Michael Wu was assisted by colleagues at Morgan Stanley including Wayne Huo, Thomas Zhu, Tony He, and Tiantian Kullander who shared his ideologies. Together, they started Amber Group as a side project in 2015.
CEO and co-founder of Amber Group, Michael Wu said, “Our journey from inception to where we are today is only possible thanks to the commitment of our team, as well as the support from our partners and investors. Our team is dedicated to our shared mission, bringing their many varied experiences in the traditional finance and technology sectors to redefine the financial ecosystem of the future.”
The founding team of 6 individuals including Michael Wu formally started the company after going full-time in 2017 and their focus became 3 important fronts which are: Institutional business, emerging creator-focused venture, and its consumer business with WhaleFin, the company’s flagship digital asset platform. The company is headquartered in Singapore, one of the world’s most crypto-friendly countries but its presence is all across Chicago, Athens, Geneva, Hong Kong, Dubai, London, Vancouver, Zurich, etc.
In 2019, Amber Group hired another ex-Morgan Stanley Asia Jeffrey Wang. According to Wang who has been heading Amber Group’s American arm whose skills and experience were better suited for digital finance. Amber Group’s main goal is to provide digital asset investing, trading, infrastructure, and financing services. The company was founded in Hong Kong but has recently relocated to Singapore.
Michael Wu said, “We recently surpassed $1 trillion in cumulative digital assets transaction volume, since our inception in 2017. Client assets on the company’s platform have exceeded $5 billion, and these are expected to continue to rise rapidly, especially with the launch of WhaleFin at the end of 2021.”
What Does Amber Group Offer?
What differentiates Amber Group from its fairly popular competitors in the industry (discussed in the next section) is the existence of its world-class product, a functionally complete digital asset platform for individuals. The name of this product is WhaleFin which brings digital wealth to empower investors. Through WhaleFin, the company has brought together all of its platform capabilities to allow investors to build wealth by democratizing access to digital assets.
Michael Wu said “Our institutional services include algorithmic execution, electronic and OTC market-making derivatives, structured products, and advisory services as part of our institutional services offering. We are the crypto market’s leading liquidity provider.”
It’s interesting to note that Amber Group started to apply machine learning algorithms for quantitative trading but shifted its focus to virtual currency trading after 2017 saw record highs in trading volume across the globe. The combination of technical tools and insights allows Amber Group to serve institutions of all sizes and types. The available institutional services are as follows:
In a way, Amber Group has encompassed all areas of crypto with the inclusion of non-fungible tokens, Decentralized Autonomous Organizations (DAOs), and emerging Web3 ecosystems. They are open to collaboration with innovative entrepreneurs for the long term.
Michael Wu said, “Amber Group sets itself apart through its vision and values; transforming the financial ecosystem to be one that is more progressive, inclusive, transparent and sustainable. Beyond the typical suite of financial services, our team is guided by this ethos and we embody this in all of our products and services.”
it is no secret that the entire crypto landscape has gone through rapid development which has resulted in all-time highs for some of the top digital assets including Bitcoin and Ethereum. The previous year saw the evolution of Non-fungible tokens (NFTs) into one of the biggest trends within the digital asset market. The global regulatory agencies are thinking over their stance towards digital assets and forming a more supportive strategy to deal with the problems that exist in this industry such as high volatility, risk of manipulation, and security concerns.
Entities like Amber Group are visibly gaining an upper hand and benefit from the growing interest in crypto assets from retail as well as institutional investors alike. As crypto acceptance becomes more mainstream, Amber Group continues to spread in more than 150 countries with a total of $5 billion worth of assets on the platform. The recent Singaporean investment from Temasek Holdings has raised the company’s total valuation to almost $3 billion.
“We currently have more than 1,000 institutional clients onboarded with Amber Group, and we expect this figure to increase following the launch of WhaleFin.” Michael Wu said.
Other than Singaporean state-owned investment firm Temasek, Amber Group has the support of 24 other companies and venture capitalists including Pantera Capital, Coinbase Ventures, True Arrow Partners, China Renaissance, Sequoia Capital China, and Tiger Global Management. Among all these, Temasek Holdings, Pantera Capital, Paradigm, and China Renaissance are the 4 lead investors. Tru Arrow Partners are the most recent addition to Amber Group’s investor list.
Steven Ji, partner at Sequoia China said, "Digital assets are becoming an increasingly important category to watch, especially for institutional investors.”
As for the competitors, the crypto industry offers several alternatives to Amber Group but not all of those entities have strengthened their position like it. In the following, we have listed two of the closest competitors of Amber Group in detail:
Run by Antonio Juliano, dYdX is a Californian blockchain platform that offers crypto derivatives trading solutions to its users that includes institutional investors as well as common individuals. Its annual revenue has risen to $2.3 million. The last year, dYdX has completed its series C funding round after raising a total of $65 million with the support of investment firms like QCP Capital, Paradigm, Kronos Research, Three Arrows Capital, Menai Financial Group, a16z, and several others.
This decentralized finance trading platform has been in the news for quite some time due to the launch of its governance token and $50,000 worth airdrop for the community. The DYDX token reached its all-time high value in September 2021 at $27.7.
The California-based company is an immensely popular platform that enables developers to build as well as host innovative and useful decentralized applications just like Ethereum but more efficiently. This private establishment was co-founded by Anatoly Yakovenko who is the current CEO. Solana has raised a total of $347 million in funding after being founded back in 2017.
SOL token of Solana blockchain reached an all-time high of $260 in November of 2021. Some of Solana’s lead and repeating investors are Andreesen Horowitz, 1kx, Polychain Capital, Alameda Research, Coinfund, Blockchange Ventures, CMS Holdings, CoinShares, ParaFi Capital, Sino Global Capital, Collab Currency, and Multicoin Capital.
Since Amber Group is a part of an innovative industry that is quickly expanding by leaps and bounds across the world after hitting mainstream adoption, the growth of this company has been explosive yet concerning. The drastic difference between the funding amount of Series A and Series B leaves many investors re-think their stance. In total, Amber Group has amassed a total of $328 million in funding which is almost 10 times that of the company’s Series A.
After hours of deep research into Amber Group’s structure, financial details, our team of analysts have determined the Oddup metrics like last valuation ($3 billion after Series B) and post-money valuation ($3.33 billion) before giving it a score of 63.21. This particular score symbolises the result of several algorithmic calculations made by our team of experts to give an idea about the probability of the company’s success.
CEO and co-founder Wu said in a statement, “From an employer branding perspective, we are trying to attract global talents, and many of those are potentially new to crypto. For them, seeing these more traditional and familiar names backing Amber helps make them more interested in joining Amber potentially.”
During this round which was closed in 2019, the WhaleFin operator caught the attention and secured the financial support of high-profile investors like Coinbase Ventures. The company was valued at $1 billion with shareholders like Sequoia China, Tiger Management according to the statement of co-founders.
Funds were utilized
Michael Wu told TechCrunch, “Many of the new investors which came in this round provide great breadth in terms of perspective, having seen many high-growth companies in fast-evolving industries go from 0 to 1, and 1 to 100,”
So far, the series B funding round has been Amber Group’s biggest victory that boosted their total valuation to a whopping $3 billion after just 7 months. It shows that the business is strategically moving ahead without getting affected by the crypto market slump. On the contrary, company revenues were at a record high in Q1 2021.
After gaining Temasek Holdings as an investing participant in its series B round, Amber Group has stated to utilize the proceeds ($300 million in total) to hire talents across Europe and even America to gauge the institutional demand in these regions.
CEO and co-founder Michael Wu said, “Whilst the drop in prices means that our AUM [assets under management] measured in dollar terms decline, in terms of the number of coins for BTC, ETH and stablecoins, they are all still growing healthily. Meanwhile, our trading business is also still flourishing with the uptick in volatility.”
CEO and co-founder Wu believes that “As the more mature traditional markets are continuing to see compressed margins and moving to automation, the crypto financial market is still in its infancy.”
Earlier this month, Amber Group revealed that it has acquired the Japanese crypto-exchange called DeCurrent. The acquisition took place through its local subsidiary named WhaleFin Holdings which is also registered in Japan. WhaleFin’s UK-based subsidiary also joined the CryptoUK trade association. Recently, the company has completed the SOC-2 audit which was conducted by Deloitte.
The CEO and co-founder Michael Wu said, “Amber is not engaged in proof-of-work mining, yet.” He’s also optimistic about where the field is headed. But based on available data, over 40% of bitcoin mining is already from renewable resources. Based on trends we see with our mining clients and partners, we believe that this number will continue to go up.”
Gradually, Amber Group is working on partnering with leading non-profit organizations to offset its carbon footprint while also supporting global developers’ talents by sponsoring hackathons across Asia. it is clear to see that the company is doing its best to fix the lack of institutional-grade infrastructure in lending and borrowing digital assets securely by becoming one of the leading digital asset platforms.
“Michael (Wu) and the team behind CLST will make uncollateralized lending and borrowing more efficient through the aggregation of deal flow and we are excited to be part of this global network at the very beginning of a new future for crypto assets in the market," says Francesco Adiliberti, Managing Director for Europe at Amber Group.