Deutsche Börse acquires 1.5% stake in Kraken for $200m

Germany's Deutsche Börse Group has acquired a 1.5% fully diluted stake in Payward Inc, the parent company of cryptocurrency exchange Kraken, for $200 million. The transaction is expected to close in the second quarter of this year, pending regulatory approval.

The deal, conducted through a secondary share acquisition, values Kraken at around $13.3 billion. This marks a decline in valuation compared to the $20 billion figure Kraken achieved last November, when Citadel Securities invested $200 million in the crypto exchange as part of a wider $800 million funding round.

Deutsche Börse's investment builds on its growing partnership with Kraken. In what was described as the "first phase" of their collaboration announced late last year, Kraken is integrating directly with 360T, Deutsche Börse's foreign-exchange trading subsidiary.

According to a statement from Deutsche Börse, the partnership also aims to "unlock a new range of enhanced products and services" across areas including custody, settlement, trading, collateral management, and tokenised assets.

This latest investment comes as Kraken continues its preparations for a potential public listing in the US. Last November, Payward Inc confidentially submitted a draft registration statement on Form S-1 with the US Securities and Exchange Commission (SEC). Details regarding the timing, share allocation, and price range for the IPO have yet to be finalised.

Meanwhile, for Deutsche Börse, the strategic investment comes a few months after it agreed a €5.3 billion deal to acquire B2B wealthtech platform Allfunds.