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Startup Digest Reading List: Semiconductor Demand and a Deep Dive into Coinbase’ S-1 Filing

Issue #144 — View online — Suggest a link
Startup Digest Reading List

A curated list of the top stories in technology, startups, and venture capital.

Welcome back to this week’s edition of Startup Digest’s Reading List.
We invested in a stealth seed stage startup founded by prominent individuals in the data infrastructure space. They are looking to hire their first core product hire to help lead product strategy.
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Written by Chris McCann, General Partner @ Race Capital, former Greylock Partners. More about me.

Big Tech News Last Week
Deep Dive into Coinbase’s S-1 Filing
Instead of my usual recap of deep dive posts, this week for fun I read through the whole Coinbase S-1 Filing and wanted to share some interesting tidbits I found along the way.
  • Coinbase is the top US based digital asset exchange.
  • They are doing a direct listing and expected to price at a market cap of $100B.
Company Details
  • Coinbase did $1.3B in revenue for 2020, and $530M in 2019.
  • Transaction revenue (from retail consumers) constitutes 96% of their revenue.
  • Coinbase has 43M “verified users” of which 2.8M are active (monthly transacting users).
  • Trading volume is variable based on the volatility of the crypto market. Institutional investors have become a bigger share of Coinbase’s trading volume. However, this is a double edged sword because the majority of Coinbase’s revenue is generated via retail traders.
  • The “assets on platform” is $90B, which is a huge number. However digging into the filing, more “custodial funds do to customers” is only $2.8B. My guess is the Coinbase custody product has low penetration, and the majority of assets are via consumer wallets.
Cap Table
  • The largest holders and biggest winners for this IPO will be Andreesseen Horowitz (A16Z - $11B), Union Square Ventures (USV - $5.1B), and Ribbit Capital ($4.4B) - assuming the price of the last secondary market sale.
  • USV conducted 4 secondary transactions selling a portion of their shares to A16Z and Paradigm.
  • Ribbit conducted 2 secondary transactions selling a portion of their shares to A16Z and Paradigm.
Interesting Tidbits 
  • Coinbase is the only company I know of that lists its corporate headquarters as “Address Not Applicable” and instead refers to itself as a remote first company.
  • The filing sends a copy to “1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa” which is the bitcoin genesis address owned by Satoshi Nakamoto. 
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Techstars Startup Digest Startup Digest Reading List is curated by:
Chris McCann Chris McCann - General Partner @ Race Capital, former Greylock Partners
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