Intercontinental Exchange Inc., or ICE, will make its cryptocurrency business public by merging it with a dedicated acquisition company, a deal that will advance the goal of launching a consumer app for trading and payments with digital assets.
The company, named Bakkt, is expected to be valued at $ 2.1 billion upon completion of the merger with VPC Impact Acquisition Holdings, the companies said Monday.
The deal brings together two of the hottest games in today’s markets: crypto and SPACs. the largest digital currency, rose above $ 40,000 for the first time last week, and SPACs had their biggest year on record in 2020, with a record $ 83 billion in new listings, according to data provider SPACInsider. SPACs, also referred to as blank check companies, are vehicles that go public to raise money for mergers and acquisitions.
As part of the deal, Bakkt will raise an additional $ 532 million from VPC’s funds and a simultaneous capital increase. That supports the development and marketing of the Bakkt app, which is seen as a tool that allows people to manage their holdings of various digital assets. This can include bitcoin, loyalty points, and rewards programs, such as those offered by Starbucks Corp. and airlines, and video game virtual assets.
More than 400,000 people have pre-signed up for the app, which is expected to roll out widely in March, Bakkt says. Bakkt expects the app to amass more than 30 million users in five years, according to a presentation on the deal released Monday. That ambitious goal would put Bakkt in the same league as other blockbuster financial apps like Robinhood, Venmo or Square Inc.’s Cash App.