When FTX unexpectedly collapsed last week, the multibillion-dollar fortune of Sam Bankman-Fried and co-founder Gary Wang evaporated in just a few hours. Similarly, many large investors such as Sequoia Capital and several other billionaires also had to write off their investments in FTX.
Part of Sequoia Capital – run by billionaires Doug Leone, Michael Mortiz, and Neil Shen invested $213.5 million in FTX. At its peak, these shares were worth $425 million.
On November 9, Sequoia priced its stake in FTX down to just $0. By November 11, FTX (both Bahamas and US headquarters) filed for bankruptcy, showing that Sequoia’s worries were correct. However, Sequoia is not the only victim to lose hundreds of millions of dollars in the FTX deal.
FTX raised at least $2.2 billion since hitting a record $40 billion valuation. According to Pitchbook, there were at least 17 other billionaires participating in funding rounds for FTX.
The world’s richest cryptocurrency billionaire Changpeng Zhao (CZ), founder and CEO of Binance, contributed significantly to FTX’s bankruptcy.
The venture capital firm CZ owns – Binance Labs was also one of the earliest investors in FTX when it participated in the $8 million seed round in August 2019.
On November 8, CZ tweeted that Binance was acquiring FTX, but withdrew a day later due to concerns about the financial situation of FTX.
Binance Labs also participated in the FTX Series A round in December 2019, the terms of which were not disclosed. Some other investors participating in this round include Masayoshi Son’s Softbank and Chase Colema’s Tiger Global Management.
In July 2021, FTX raised another $1 billion, bringing its valuation to $18 billion. Investors include Brian Armstrong’s Coinbase Ventures; Daniel Loeb’s Third Point; Thoma Bravo by Carl Thoma and Orlando Bravo and at least four other billionaires: Israel “Izzy” Englander, Alan Howard, Paul Tudor Jones, and Dan Och. Through this round, Softbank doubled its stake in FTX, while Sequoia Capital was the first to join.
Just 3 months later, in October 2021, FTX raised an additional $421 million at a $25 billion valuation in cash from 69 investors. Some of the new joiners include an investment management firm founded and run by Larry Fink. Iconiq Capital, which manages money for Mark Zuckerberg and other Silicon Valley tycoons, as did Barry Silbert’s crypto conglomerate Digital Currency Group and Samsung NEXT Ventures, the investment arm of Samsung, overseen by Jay Y. Lee, who replaced his late father as executive chairman of the South Korean electronics giant in October.
Then, on January 26, 2022, the US branch of FTX raised $400 million in its first and only funding round, at a valuation of $8 billion. At the same time, parent company FTX also raised an additional $400 million from more than 10 investors, bringing its valuation to $32 billion. Softbank participated in both rounds, while Tiger Global increased its investment in FTX, along with Nikil Viswanathan and Joe Lau’s Alchemy Ventures.
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