Coinbase IPO: 7 Key Takeaways Investors Should Know

It was reported recently that Coinbase helped facilitate the $1.5 billion Bitcoin purchase that Tesla Inc TSLA 0.99% made.

Assets from institutional customers were up 590% from fiscal 2019 to fiscal 2020.

Revenue Growth: Coinbase had revenue of $1.3 billion in fiscal 2020, which was up from the $533.7 million reported in fiscal 2019.

Subscription Revenue: Coinbase gets the majority of its revenue from cryptocurrency transactions. In 2020, 96% of revenue came from transactions. Subscription revenue was $45 million in fiscal 2020, up 126% year-over-year. Other revenue was $136.3 million in fiscal 2020, up 168% year-over-year.

“We are committed to growing more stable revenue from subscription products and services, and expect they will contribute a larger portion of our total revenue over time,” the company said.

Subscription products and service revenue grew 126% year-over-year.

Strong Focus on Cybersecurity: Coinbase mentions several times in the filing that it has a strong focus on cybersecurity.

“We have a trusted platform owing to our heritage of security and culture of regulatory compliance,” Coinbase said. The company said its investments in regulatory compliance and cybersecurity help earn the trust of customers.

The company has proprietary crypto compliance infrastructure in place.

Executives Will Control Vote: Coinbase Co-Founder and CEO Brian Armstrong owns 10.9% of Class A shares and 21.8% of Class B shares. Armstrong controls 21.7% of the voting power for Coinbase.

Silicon Valley heavyweight investor Marc Andreessen owns 24.6% of Class A shares and 14.2% of Class B shares. Andreessen has 14.3% of the voting power for Coinbase.

Coinbase executives and directors control 54% of the voting power for the company.

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