Tether (USDT) is making a $10 million equity investment in the Celsius Network (CEL) crypto-currency lending platform with a pre-money valuation of $120 million, bringing the post-money valuation to $150 million.
The company has raised $30 million in its first round of capital. In 2018, Celsius completed a $50 million ICO. Celsius CEO Alex Mashinsky told Cointelegraph that his company has continued its policy of not raising funds from venture capital.
Celsius Network sells two-thirds of its $15 million stock offering on day one
Investors will have no say
Mashinsky also pointed out that the capital sold in this round does not come with voting rights. This ensures that investors will not be able to force the company to change its core mission of sharing 80% of profits with the community. He believes this is what sets Celsius apart from the competition:
„I think they [BlockFi] raised something like $20 million, at $30 million before [the valuation of the money]. Then they donated more than half. Now they’re raising another $30 [million] at $60 [million in pre-money valuation]. Basically, the founders own a very small percentage of the company, maybe 10% or less. And here we intentionally don’t give any of the investors a vote. So I’m still the largest shareholder and then we have control of the company. Very important for us so that the investors are not going to change: we give 80% back to the community. So I wanted to make sure that nobody came in and said ‚Hey, you’re making a profit, so why don’t you take it yourself or why don’t you pay the dividends?
Tether is not a toxic investor
Tether explains why he hasn’t burned any USDT
Mashinsky doesn’t think Bitcoin Champion is a toxic investor. In his opinion, the market is the best judge and since all the lawsuits have been filed against the company, the market capitalization of USDT has increased nine-fold:
„If you look at what the tokenization was when the lawsuits were filed and what it is now, it increased nine times, it was $1 billion, now it’s $9 billion. If there were any concerns about not trusting Tether, investors wouldn’t be [investing].
Better than competition
The Celsius CEO also says that Tether, being such a dominant player, choosing his company for a strategic investment over his competition is an important endorsement:
„The important thing is that Tether has nine billion dollars worth of tokenized dollars. That’s 90% of all the stable currencies that exist. The fact that they chose Celsius is very important, because obviously they could have worked with anyone, they could have chosen BlockFi or Nexo, or anyone.
Bloomberg: „It’s only a matter of time before Tether takes Ether out of second place in the market.
On the question of why Celsius is raising funds only two years after the successful ICO, he explained that the injection of additional capital is necessary if the company is to achieve its ambitious goals:
„First you raise money when you can, not when you need it. And it was important that we have other strategic investors coming in. Tether is not the only one, we have several partnerships. We want to see several billion dollars in assets, we want to have one billion gold, several billion Bitcoin. These things require a lot of capital to grow the platform.
Mashinsky also hinted that in the coming months, Celsius will be „bringing together all the services that Tether and Bitfinex offer.
Cointelegraph contacted Tether for comments, but did not receive a response in time for publication.