More than a decade after the initial Tech media buzz digital wallets are enjoying adoption largely driven by stimulus check processing and more recently the cryptocurrency craze. The pace of innovation is accelerating as digital wallets incorporate equity trade execution, cryptocurrency transaction capabilities and more. Many will know of PayPal / Venmo, Square’s Cash App, Apple Pay, Google Pay, Robinhood, Webull and eToro – each of which pursues the market from a different angle. A relatively new entry is Bakkt, which was founded in 2018 by Intercontinental Exchange (tkr: ICE). Below we provide detail about Bakkt – a digital wallet used for storing, tracking and transacting in cash, digital currency, in-game assets, gift cards and rewards programs.
- Bakkt is going public via a SPAC merger: Bakkt is in the process of going public via a SPAC named VPC Impact Acquisition Holdings (tkr: VIH). VIH is sponsored by Victory Park Capital. Post merger the combined company will be known as Bakkt Holdings. View the Bakkt investor presentation HERE.
- Bakkt Holdings CEO: Gavin Michael – the former head of technology for Citibank’s Global Consumer Bank – is Bakkt CEO and will continue to serve as CEO post-merger.
- Bakkt Holdings valuation: Post-SPAC merger Bakkt Holdings will carry an Enterprise Value of approximately $2.1 billion.
- Market traction: Bakkt supports more than 30 loyalty program sponsors and 200-plus gift card merchants. Starbucks has integrated Bakkt Cash as a payment method for customers. The Bakkt App currently has more than 400,000 consumers subscribed for early access.
- Investors: Bakkt has raised approximately $483 million across Series A and B rounds, $883 million including the $400 million ICE investment. In addition to Intercontinental Exchange, outside investors include Microsoft’s M12 venture arm, The Boston Consulting Group and Pantera Capital to name several.
- Acquisition: Intercontinental Exchange acquired Bridge2 Solutions on February 21st 2020 ($261 million cash consideration, $217 million of Goodwill), and merged it with Bakkt. Bridge2 Solutions is a leading provider of loyalty solutions for merchants and consumers.