In a bid to revive its fortunes, crypto infrastructure firm Bakkt has secured a critical capital injection through a $37.6 million securities purchase agreement. The move comes after the company warned investors of a potential cash crunch last month, underscoring the challenges it has faced in recent times.
The transaction involved the issuance of over 34 million shares of Bakkt’s Class A common stock at approximately 87 cents each, in a registered direct offering to institutional investors. Additionally, Bakkt’s former parent company, Intercontinental Exchange (ICE), acquired 2.8 million shares, representing the first part of a larger concurrent offering.
Bakkt’s CEO expressed excitement about this development, stating that the additional capital will be used to support working capital and general corporate purposes, as the company focuses on driving toward profitability.
Once considered a promising player in the crypto space, Bakkt has struggled to find its footing amid a series of strategic pivots, ranging from bitcoin futures to a crypto super app. Despite an initial surge in its share price following a SPAC deal in 2021, the company’s valuation has plummeted, currently trading at around 61 cents with a market capitalization of just $202 million.
To address its financial challenges, Bakkt recently secured approval for a shelf registration, allowing it to raise up to $150 million in capital over the next three years through multiple offerings.
While Bakkt’s preliminary earnings for the fourth quarter of 2023 showed improved sales, primarily driven by the acquisition of a crypto trading company, the company still reported significant losses for the first nine months of the year.
As Bakkt navigates its path toward profitability, this $37.6 million funding boost provides a much-needed injection of capital to support its turnaround efforts. The company aims to leverage this funding to solidify its position in the evolving crypto markets and unlock new opportunities for growth and sustainability.
