Crypto Trading Giant Wintermute In Fundraising Talks
The Takeaway
• Wintermute is Robinhood’s biggest crypto market maker
• Firm filled vacuum after rival market makers shuttered or pulled back
• Wintermute is profitable, expanding in Asia
Wintermute Trading, the crypto trading firm that has become a dominant market marker since the collapse of FTX, has been in talks to raise fresh money in a funding round, according to investors with knowledge of the process.
The firm has been discussing a share sale of $100 million, with some of that money going to existing shareholders. Wintermute will also issue new shares, the people said, although the amount couldn't be learned. The talks are in flux and details are not finalized, the people added.
Wintermute buys and sells crypto on exchanges like Binance, Coinbase and Kraken, ensuring investors can trade quickly, and makes money on the spread. The firm gained market share after some market making rivals were wiped out following FTX’s implosion in 2022, and as big traditional quantitative trading firms including Jump Trading and Jane Street pulled back from crypto trading.
That has put Wintermute in a prime position to benefit as investor interest in trading crypto picked back up. The firm is currently profitable, the people said, though it’s yet to match the peak of its 2021 performance, when it generated $1.05 billion in revenue and $582 million in net profit.
A representative for Wintermute did not immediately have a comment.
One sign of Wintermute’s dominance is its relationship with crypto and stock trading app Robinhood. Market makers like Wintermute and Citadel Securities pay Robinhood in exchange for the app sending them orders to execute. Wintermute was Robinhood’s biggest crypto maker in the first quarter, according to a Robinhood filing, and its payments made up 10% of Robinhood’s $618 million in overall revenue.
Wintermute has also benefited from the launch of bitcoin exchange-traded funds earlier this year. In the U.S., Wintermute is a significant liquidity provider for crypto exchange Coinbase, where many fund issuers buy and sell the bitcoin that the ETFs hold. It also executes bitcoin trading for some ETF issuers in Hong Kong and the U.S. directly, without going through an exchange like Coinbase.
Wintermute CEO Evgeny Gaevoy founded the firm in London in 2017 after a decade-long trading career at Optiver, one of the world’s oldest market-making firms. His wife, Marina Gurevich, was part of the founding team and is the firm’s now chief operating officer. Wintermute’s last disclosed fundraising was a $20 million Series B round in 2021 led by Lightspeed Venture Partners, with participation from investors including Pantera Capital.
Wintermute has been expanding in Asia, opening a Singapore office in 2021 and moving some of its staff, including co-founder Yoann Turpin, there last year. The firm also has a venture arm, which backed more than 100 projects including crypto exchange Crossover Markets and brokerage Hidden Road.