Why did Celsius raise money? A letter from our CFO, Harumi Urata-Thompson
I was always a part of large global corporations until one day, I wasn’t. As soon as I began to go down the road of small business and entrepreneurship, one of the things that I immediately had to deal with was capital. I learned a lot about that since. As the current CFO of Celsius, I would like to share a thing or two of what I learned and apply that to the situation of Celsius to crack the mystery of why a blockchain company might raise equity capital.
I still remember the day when I went to a presentation by Naveen Jain, a super entrepreneur. There were a lot of important things that he brought up, one of them was about funding. He said (in summary), It is when you say no to someone’s money, everyone turns around and starts giving you money. The challenge is to get to the place where you are in the position of being able to do so. In an environment where over 90% of startups fail (mostly due to issues around funding), this was painful but precious advice. Everyone can use additional funding to get the company bigger but how do we get to the place where you don’t have to rely on someone else’s money?
So, let’s talk about Celsius. We have raised $19+ million through a strategic lead investor and individuals like you and me who believe in what Celsius does. If you have not had the chance to check out our fundraising page, check this out. Then let us talk a bit more about equity funding.
What is equity funding? It is a process of raising capital through the sale of shares. Let’s ask ourselves: Why do some of us not like the sound of a community-based company like Celsius raising money through this process? Is it because we feel like the company may start managing itself differently to address the shareholders’ needs? What if the money comes from people like yourselves, who believe in Celsius, and strategic investors who only want to help us with immediate cash needs so we can properly grow without changing the company direction at all?
Nearly half of our equity funding is coming from our fundraising page, meaning the funding is coming from individuals who believe in the potential of Celsius. Our lead investor is an institutional investor who also strongly believes in us. They believe in us so strongly that they were fine to not accept a board seat. We are running a very responsible organization. We have a strong strategy which will be executed under the supervision of a management team with experience in growing and scaling startups. We the Celsius Network management team will stick to the strategy and execute our plan but only as the community sees fit. The direction of management will not come from anywhere else.
Let’s review what we have achieved so far. From the start of the company, we have had 139,000 signups, 42,000 active customers, provided service in 182 number of countries, 1,600,000,000 coin holdings, $780 million customer assets, paid out whopping $21,500,000 as awards payment to all the customers and CEL has risen to 40–50 cents in a blink of an eye. What are we going to do now with the money that we raised? We are going to spend it in the areas that allow us to grow and change the “banking experience” for a larger number of people in many more countries. We will acquire additional licenses in different parts of the world and expand into the new markets like Asia. We will find additional exchanges to work with to ensure even more liquid and active CEL tokens. We will hire more people to have a bigger reach and even better service. We will develop infrastructure so our whole business is scalable. If you call us eager and dreamy for trying to achieve all this, call us that! That’s what we are aiming for, and to do that, we need a lot of resources.
Because we have such a big dream, it is actually a really good thing that we have led our equity funding journey with a strategic institutional investor, Tether. They combed through our management, financials, compliance status and everything else that an institution needs to be mindful of before investing. After all that they still supported a high valuation of $120 million pre-funding and provided us the capital with no strings attached because they strongly believe in us, what we do, and our plan of how to spend this money strategically. A number of people have already been asking if there will be another opportunity where they can invest. Yes, there will be! Normally when a company raises money through equity, there are several different rounds and each round tends to get bigger. The round we are going through is typically called “Series A.” Funding phases often start with what we call pre-seed and/or seed funding, through which a company defines what problem it solves and how. Then the funding starts to focus on scaling the business. This is typically a round for a company with some track record that is trying to scale and optimize. That’s where we are. We are definitely coming in on the bigger end of typically-sized Series A funding. You guessed it — A is usually followed by B and C. It can go up to E but for many successful firms, unless something else happens, Series C tends to be the last round. Series B tends to take the business to the next level and Series C tends to start getting the firm ready for acquisition or an IPO. Of course, this is not the case 100% of the time, but just a general gauge.
If you have any questions or concerns on our need for funding, we invite you to the Companies House in the UK where we recently completed our first audit and filed our financials from the previous year. This is from the 2018 Mar-2019 Feb financials due to COVID-19. And we just started to work on 2019 Mar-2020 Feb audit work without missing a beat. If after you go through any of these audited information and still have concerns, contact us. You know how to find us. After all, we are a blockchain company; a transparent, trackable company that always acts in your best interest.
About Celsius Network
Celsius Network is a democratized interest income and lending platform accessible via a mobile app. Built on the belief that financial services should only do what is in the best interests of the community, Celsius is a modern platform where membership provides access to curated financial services that are not available through traditional financial institutions. Crypto holders can earn interest by transferring their coins to their Celsius Wallet and borrow USD against their crypto collateral at interest rates as low as 4.95% APR.
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