Who Owns Coinbase?

Main individual shareholders comprise co-founders Brian Armstrong (59.5% voting power), Frederick Ernest Ehrsam (26.1% voting power), and other individual investors such as Surojit Chatterjee (current CPO “poached” from Google), Paul Grewal (former magistrate who joined Coinbase as Chief Legal Officer), and venture capitalists who early on invested on Coinbase, like Marc Andreessen (founder of a16z) and Fred Wilson (founder of Union Square Ventures), together with venture capital firms like  Andreessen Horowitz, Paradigm, Ribbit Capital and Union Square Ventures.

From the ashes of Mt. Gox

It is worth exploring, in a nutshell, the story of Mt. Gox.

When Jed McCaleb, back in 2010, had read about Bitcoin on a PR release over Slashdot, he was convinced that an exchange would have helped Bitcoin grow, so he set it up on a website he had bought years before for an online magic game called “Magic: The Gathering Online” which would be reused as the domain for Mt. Gox.

Once set up, the exchange quickly picked up, and it became the most successful Bitcoin exchange platform in a short time frame.

However, it has been shown since the beginning one of the significant drawbacks of exchange platforms: is security, where the Blockchain protocol had been designed for security and privacy.

Once people started to exchange Bitcoins via Mt. Gox, two issues came up quickly: one, the identity of Bitcoin holders that, through the Blockchain, was kept private, would be quickly revealed via Mt. Gox.

Second, as more people referred to Mt. Gox to store their Bitcoins, security problems became a major issue. Indeed, by 2014 Mt. Gox had to file for bankruptcy as a massive number of Bitcoin had been stolen by hackers, thus exposing Mt. Gox to substantial financial liability.

That lesson, costly for Mt. Gox, would become a valuable lesson for all the other crypto platforms that survived.

Coinbase’s services have been modeled around the main customers. Perhaps, retail users can trade multiple crypto assets.

While institutional clients have access to an advanced platform for both trading and securing crypto assets.

Image Source: Coinbase S-1

Customer Composition

  • Retail users: Coinbase offers a “safe, trusted, and easy-to-use platform to invest, store, spend, earn, and use crypto assets.”
  • Institutions: Coinbase offers a “one-stop shop for accessing crypto markets through advanced trading and custody technology, built on top of a robust security infrastructure.”
  • Ecosystem partners: developers, and merchants can build applications on top of the platform, and participate actively in the protocols part of the Coinbase offering.

Ownership Structure of Coinbase

The ownership of Coinbase is mainly concentrated among its co-founders and other individual investors, along with support from prominent venture capitalists and venture capital firms.

Main Individual Shareholders

  • Brian Armstrong: As a co-founder of Coinbase, Brian Armstrong holds significant voting power in the company, with 59.5% of the voting rights.
  • Frederick Ernest Ehrsam: Another co-founder, Frederick Ernest Ehrsam, also holds a substantial portion of the voting power, accounting for 26.1% of the total.
  • Surojit Chatterjee: Surojit Chatterjee, the current Chief Product Officer, was “poached” from Google and is a notable individual investor in Coinbase.
  • Paul Grewal: Paul Grewal, former magistrate who joined Coinbase as Chief Legal Officer, is also a key individual investor.

Venture Capital Investors

Coinbase has garnered support from renowned venture capitalists and venture capital firms in the crypto and tech industry:

  • Marc Andreessen: Marc Andreessen, the founder of a16z (Andreessen Horowitz), is an early investor in Coinbase.
  • Fred Wilson: Fred Wilson, founder of Union Square Ventures, also participated as an early investor in Coinbase.
  • Andreessen Horowitz: The venture capital firm Andreessen Horowitz is a significant investor in Coinbase.
  • Paradigm: Paradigm, another venture capital firm, has invested in Coinbase.
  • Ribbit Capital: Ribbit Capital is also among the venture capital firms that support Coinbase.
  • Union Square Ventures: In addition to Fred Wilson’s individual investment, Union Square Ventures, the venture capital firm itself, is also an investor in Coinbase.

From the Ashes of Mt. Gox

The story of Coinbase is linked to the infamous Mt. Gox, a Bitcoin exchange platform that faced security issues and eventually filed for bankruptcy in 2014. The lessons learned from Mt. Gox’s security breaches became valuable insights for Coinbase and other surviving crypto platforms.

Coinbase’s Customer Composition

Coinbase caters to a diverse customer base, providing tailored services for different segments:

  • Retail Users: Coinbase offers a safe, trusted, and user-friendly platform for retail investors to invest, store, spend, earn, and use various crypto assets.
  • Institutional Clients: Institutional investors have access to an advanced platform for both trading and securing crypto assets, built on a robust security infrastructure.
  • Ecosystem Partners: Developers and merchants can build applications on top of the Coinbase platform and actively participate in the protocols offered by Coinbase.

The ownership structure of Coinbase reflects a strong backing from its co-founders and early individual investors, along with support from prominent venture capitalists and venture capital firms, solidifying its position as a leading player in the crypto industry.

Key Highlights

  • Coinbase’s Leadership and Investors:
    • Paul Grewal joined Coinbase as Chief Legal Officer.
    • Notable venture capitalists invested early in Coinbase: Marc Andreessen (founder of a16z) and Fred Wilson (founder of Union Square Ventures).
    • Major venture capital firms supporting Coinbase: Andreessen Horowitz, Paradigm, Ribbit Capital, and Union Square Ventures.
  • The Mt. Gox Saga:
    • Founded by Jed McCaleb in 2010 after learning about Bitcoin.
    • Initially set up on a website previously used for “Magic: The Gathering Online”.
    • Quickly became a leading Bitcoin exchange but faced security challenges.
    • By 2014, Mt. Gox filed for bankruptcy due to a large-scale Bitcoin theft.
  • Coinbase’s Services:
    • Retail Users: A platform to invest, store, spend, earn, and use crypto assets.
    • Institutions: Access to advanced trading and custody technology with robust security.
    • Ecosystem Partners: Developers and merchants can build applications on the platform and engage actively in the protocols.
  • Ownership Structure:
    • Concentrated among co-founders, individual investors, and venture capital firms.
    • Brian Armstrong: Co-founder with 59.5% of voting rights.
    • Frederick Ernest Ehrsam: Co-founder with 26.1% of voting rights.
    • Surojit Chatterjee: Notable individual investor and the current Chief Product Officer.
    • Paul Grewal: Key individual investor and Chief Legal Officer.
    • Venture Capital Backing: Notable firms include Andreessen Horowitz, Paradigm, Ribbit Capital, and Union Square Ventures.
  • Lessons from Mt. Gox:
    • The security failures of Mt. Gox served as important lessons for Coinbase and other crypto platforms.
  • Diverse Customer Base:
    • Coinbase caters to retail users, institutional clients, and ecosystem partners with tailored services.
  • Coinbase’s Position:
    • Backed by influential co-founders, individual investors, and prominent venture capital firms, making it a dominant force in the crypto world.

Visual Stats Related to Coinbase

Coinbase Business Model

Coinbase is among the most popular platforms for trading and storing crypto-assets, whose mission is “to create an open financial system for the world” by enabling customers to trade cryptocurrencies. Its platform serves both as a search and discovery engine for crypto assets. The company makes money primarily through fees earned for the transactions processed through the platform, custodial services offered, interest, and subscriptions.

Coinbase Revenue

Coinbase generated $3.2 billion in revenue in 2022, compared to $7.84 billion in 2021 and $1.28 billion in 2020.

Coinbase Revenue Breakdown

Coinbase generated $2.35 billion in transaction revenue, $792 million in subscriptions and services, and $45 million in other revenue. In 2022, transaction revenue represented almost 74% of the total revenue, compared to subscription and services, which represented nearly 25%.

Coinbase Financials

Coinbase generated $3.2 billion in revenue and reported a net loss of $2.62 billion in 2022, compared to $7.84 billion in revenue and $3.6 billion in net profits in 2021.

Coinbase Trading Volume by Investor

Coinbase reported $663 billion in trading volume from institutional investors vs. $167 billion from consumers in 2022, compared to $1,136 billion from institutional investors in 2021 and $535 in consumer trading volume.

Coinbase Trading Volume by Crypto Asset

In 2022, on Coinbase, 45% of the trading volume came from Bitcoin and 25% from Ethereum. Compared to 55% from Bitcoin and 21% from Ethereum in 2021.

Connected Business Models

Robinhood Business Model

Robinhood is an app that gamifies investing in stocks, ETFs, options, and cryptocurrencies, all commission-free. While the app is commission-free, Robinhood made $1.81 billion in total revenues in 2021, primarily based on transaction-based revenue representing over 77% ($1.4 billion) of the company’s overall revenues. Transaction-based revenues primarily include payment for order flow from routing customer orders for options, cryptocurrencies, and equities to market makers.

FTX Business Model

FTX is a cryptocurrency exchange platform headquartered in the Bahamas but incorporated in Antigua and Barbuda. The platform was founded by Sam Bankman-Fried, who became inspired to make money for the greater social good while studying at MIT. On a mobile-based trading app, retail and institutional traders can buy and sell futures, options, leveraged tokens, fiat currency, cryptocurrency, and non-fungible tokens (NFTs). Users can receive discounts on trading fees by using the native token FTT. FTX makes money through various trading fees, including maker fees, taker fees, NFT fees, and margin borrower interest. The company also charges interest on its institutional loan service and collects a fee from merchants who want to accept cryptocurrency as payment.

Binance Business Model

Binance is a cryptocurrency exchange domiciled in the Cayman Islands. It was founded in 2017 by Changpeng “CZ” Zhao and Yi He. During a game of poker in 2013, Zhao first learned of the potential of bitcoin. Soon after, he decided to go all-in on the cryptocurrency, selling his apartment to buy as much as he could. Binance revenue comes from six key areas: trading, withdrawal, and deposit fees; margin-borrow interest, futures trading fees, and cross-collateral interest rates.

Afterpay Business Model

Afterpay is a FinTech company providing the “buy now, pay later” solution as a core service. When a consumer purchases a product, Afterpay pays the seller and asks the consumer to pay 25%. The remaining 75% is paid in three fortnightly installments that are also interest-free. Afterpay, in turn, makes money via merchant and late fees.

Quadpay Business Model

Quadpay was an American fintech company founded by Adam Ezra and Brad Lindenberg in 2017. Ezra and Lindenberg witnessed the rising popularity of buy-now-pay-later service Afterpay in Australia and similar service Klarna in Europe. Quadpay collects a range of fees from both the merchant and the consumer via merchandise fees, convenience fees, late payment, and interchange fees.

SoFi Business Model

SoFi is an online lending platform that provides affordable education loans to students, and it expanded into financial services, including loans, credit cards, investment services, and insurance. It makes money primarily via payment processing fees and loan securitization.

Chime Business Model

Chime is an American neobank (internet-only bank) company, providing fee-free financial services through its mobile banking app, thus providing personal finance services free of charge while making the majority of its money via interchange fees (paid by merchants when consumers use their debit cards) and ATM fees.

How Does Venmo Make Money

Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for various services. The service is free, but a 3% fee applies to credit cards. Venmo also launched a debit card in partnership with Mastercard. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.

FinTech Business Models

Fintech business models leverage tech and digital to enhance the financial service industry. Fintech business models, therefore, apply tech to various financial service use cases. Fintech business model examples comprise Affirm, Chime, Coinbase, Klarna, Paypal, Stripe, Robinhood, and many others whose mission is to digitize the financial services industry.

Related Tech Ownership Case Studies

Who Owns OpenAI

OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019, which comprised an entity called OpenAI LP and the non-profit parent foundation OpenAI. The lab, which was founded in 2015 by Elon Musk, Sam Altman, and various others, has a core focus on the development of friendly AI that benefits society as a whole. Yet now has primarily evolved as a capped-for-profit entity with an exclusive commercial license to Microsoft.

Who Owns Airbnb

Its co-founders primarily own Airbnb: Brian Chesky, with 76,407,686 Class B shares, which gives him 29.1% of ownership; Nathan Blecharczyk, with 232,306 Class A and 64,646,713 Class B, which give him 25.3%; and Joe Gebbia, which has 5,113,865 Class A and 58,023,452 Class B, which give him 22.9% ownership.

Who Owns Google

Google is primarily owned by its founders, Larry Page and Sergey Brin, who have more than 51% voting power. Other individual shareholders comprise John Doerr (1.5%), a venture capitalist and early investor in Google, and CEO, Sundar Pichai. Former Google CEO Eric Schmidt has 4.2% voting power. The most prominent institutional shareholders are mutual funds BlackRock and The Vanguard Group, with 2.7% and 3.1%, respectively.

Who Owns Facebook

Mark Zuckerberg is the largest shareholder in the company. Zuckerberg retains ownership and control of the company. Like Google, Facebook has issued two common stocks, Class A and Class B. The holders of Class B common stocks are entitled to ten votes per share, and holders of our Class A common stocks are entitled to one vote per share. Mark Zuckerberg has a voting power of 56.9%; he’s the primary decision-maker. Other individual investors comprise Sheryl Sandberg, Christopher Cox, Marc Andreessen, Peter Thiel, Dustin Moskovitz, and Eduardo Saverin.

Who Owns Apple

As of 2023, major Apple shareholders comprised Warren Buffet’s Berkshire Hathaway with 5.73% of the company’s stock (valued at over $130 billion). Followed by other individual shareholders like Tim Cook, CEO of Apple, with about 3.3 million shares, Artur Levinson, chairman of Apple, with over 4.5 million shares, and others.

Who Owns Amazon

With 64,588,418 shares, Jeff Bezos is the major individual investor. Owning 12.7% of the company. Other top individual investors comprise Amazon’s CEO Andy Jessy, with 94,729 shares. Top institutional investors include mutual funds like The Vanguard Group (6.6% ownership) and BlackRock (5.7% ownership). 

Who Owns Microsoft

Major shareholders comprise co-founder Bill Gates, who stepped down from the company’s board in 2020, which is why these shares are no longer publicly reported. In 2019, Gates still owned a stake of 103 million stocks, which accounted for 1.34% of the company’s ownership (worth over $23 billion in January 2023). Other individual shareholders comprise Satya Nadella, the company’s CEO, Brad Smith (former president), Jean-Philippe Courtois (EVP), and Amy Hood (former CFO).

Who Owns Tesla

By 2022, most of Tesla’s shares are still owned by Elon Musk, among the company’s co-founders and the CEO. Elon Musk is the top individual investor, with a 23.5% stake in the company, equivalent to over 244 million shares. Musk is followed by Lawrence Ellison (founder of Oracle), with a 1.5% company stake. Ellison also sits on Tesla’s board. And Antonio Gracias, among the company’s first investors, has over 1.6 million shares. Other institutional investors and mutual funds like The Vanguard Group (6%), Blackrock (5.1%), and Capital Ventures International also have a good chunk of the company’s stocks.

Who Owns PayPal

PayPal was first founded in 1998; it was called Confinity (among its founders was Peter Thiel); later, it merged with X.com, its major competitor, founded by Elon Musk (which would become known for other companies like Tesla and SpaceX). From this merger, PayPal was born. In 2002, PayPal was bought by eBay for $1.5 billion. eBay spun off PayPal in 2015, which would be listed as an independent entity. Today PayPal owns brands like Braintree, Venmo, Xoom, and iZettle.

Who Owns Netflix

Netflix’s largest individual shareholder is Reed Hastings, co-founder, and former CEO of the company, now Chairperson of Netflix, with a 1.7% stake, valued at over $2.4 billion in February 2023. Other significant individual shareholders comprise Jay C. Hoag, the company’s directors since 1999, and Ted Sarandos, former chief content officer and now Chief Executive Officer of Netflix. Major institutional shareholders comprise The Vanguard Group (7.55% ownership), BlackRock (6.58% ownership), and Capital Research Global Investments (5.84% ownership).

Who Owns TikTok

TikTok is owned by ByteDance, a Chinese internet technology company owning several content platforms worldwide (Douyin, Toutiao, Xigua Video, Helo, Lark, Babe). Bytedance passed the $300 billion private market valuation by 2022, making around $58 billion in revenue in 2022, over $4 billion from TikTok.

Who Owns YouTube

Acquired by Google, in 2006, for $1.65 billion, YouTube is now worth many times over. In 2022, YouTube generated over $29 billion in revenue from advertising alone. YouTube is part of Google (now named Alphabet), and as such, it is owned by main Google’s Alphabet shareholders and is one of the fastest-growing segments for the company.

Who Owns Twitter

As of April 25th, 2022, Elon Musk tried to take over Twitter. Musk tried to purchase the company at $54.20 per share, or about $44 billion. The deal finally closed by October 27th, 2022, and Elon Musk became the largest shareholder.

Who Owns Spotify

The multi-billion music streaming company Spotify is primarily owned by its founders, Daniel Ek and Martin Lorentzon. As of 2023, Daniel Ek has 16.5% ownership of ordinary shares and 31.7% of the voting power. Martin Lorentzon has 10.9% of ordinary shares and 42.6% of the voting power. Another key shareholder is Baillie Gifford & Co, a Scottish-based money management firm, followed by Morgan Stanley, T. Rowe Price, and Tencent.

Who Owns Nvidia

The top individual shareholder of NVIDIA is Jen-Hsun Huang, founder, and CEO of the company, with 87,521,722 shares giving him 3.50% ownership. Followed by Mark A. Stevens, venture capitalist and a partner at S-Cubed Capital, who was part of the NVIDIA board in 2008 and previously served as a director from 1993 to 2006, with 6,258,803 shares. Institutional investors comprise The Vanguard Group, Inc, with 196,015,550, owning 7.83%. BlackRock, Inc., with 177,858,484, owns 7.10%. And FMR LLC (Fidelity Institutional Asset Management) with 158,039,922, owning 6.31%.

Who Owns Uber

Uber’s principal individual shareholders comprise Yasir Al-Rumayyan (3.73%), the Governor of the Public Investment Fund, the sovereign wealth fund of the Kingdom of Saudi Arabia, and Dara Khosrowshahi, the founder and CEO of Uber. There is Morgan Stanley, with 5.12% ownership among the top institutional investors.

Who Owns Shopify

The founder and CEO of Shopify, Tobias Lütke, owned or controlled 7,891,852 Class B multiple voting shares and 5,250 Class A subordinate voting shares, representing approximately 33.8% of the aggregate voting power attached to all of the Company’s outstanding voting shares. Another key stakeholder is John H. Phillips, an angel investor who placed an early bet on Shopify.

Who Owns Roblox

Roblox is owned by David Baszucki and Gregory Baszucki, with a 2.3% and 2.6% stake, respectively. Anthony lee, managing partner at Altos Ventures, with a 15.3% stake.

Who Owns Twitch

In 2014, Twitch was bought by Amazon for $970 million. Therefore Twitch is part of Amazon, comprising other subsidiaries bought over the years, like Audible, Whole Foods, and Zappos (in total, Amazon has 12 subsidiaries). Therefore, as of 2020, Twitch is a multi-billion dollar company, making money primarily via advertising through its video streaming platform (creators use Twitch today across many other verticals).

Who Owns Zoom

Zoom’s principal private shareholders comprise Eric S. Yuan, a Chinese-American billionaire businessman that founded Zoom. Dan Scheinman, board member and angel investor in Zoom since the start, and Santiago Subotovsky, also an early investor in Zoom. Zoom follows a freeterprise business model where free accounts are channeled into enterprise customers.

Who Owns Activision

In one of the largest deals in the business world, Microsoft acquired Activision Blizzard in a $68.7 billion transaction. Making Microsoft the world’s third-largest gaming company by revenue, behind Tencent and Sony. However, given the size of the deal, this is still under the scrutiny of regulators who need to approve it. If the deal goes through, Microsoft will become among the largest gaming companies in the world.

Who Owns Pixar

Pixar is owned by The Walt Disney Company, which acquired it in 2006 in a $7.4 billion deal. Today Pixar is part of the Disney Empire. The principal shareholders of Disney comprise Robert Iger, CEO of the company, and institutional investors like The Vanguard Group and Blackrock.

Who Owns Salesforce

Marc Benioff, Co-CEO of Salesforce, is the primary individual shareholder, with 3% of the company’s stock. Other main individual shareholders comprise Parker Harris, Co-Founder and Chief Technology Officer, and Bret Taylor, former co-CEO. Major institutional shareholders include The Vanguard Group, Fidelity, and BlackRock.

Who Owns Slack

In a $27.7 billion deal in 2021, Salesforce’s finalized the acquisition of Slack, which was integrated into Salesforce. Today Slack is still a product mostly independently managed by Salesforce, which incorporated some of its features within its platform. Entrepreneur Marc Benioff primarily owns salesforce.

Who Owns Snapchat

Evan Spiegel and Robert Cornelius Murphy are the co-founders and, respectively, CEO and CTO of Snapchat. Evan Spiegel owns 3% of Class A stocks, 25.7% of Class B stocks, and 53.4% of Class C stocks for a 53.2% voting power, whereas Robert Murphy owns 6% of Class A stocks, 25.7% of Class B stocks, and 46.6% of Class C stocks for a 46.6% voting power. Snapchat runs an advertising-based business model.

Who Owns Coinbase

Main individual shareholders comprise co-founders Brian Armstrong (59.5% voting power), Frederick Ernest Ehrsam (26.1% voting power), and other individual investors such as Surojit Chatterjee (current CPO “poached” from Google), Paul Grewal (former magistrate who joined Coinbase as Chief Legal Officer), and venture capitalists who early on invested on Coinbase, like Marc Andreessen (founder of a16z) and Fred Wilson (founder of Union Square Ventures), together with venture capital firms like Andreessen Horowitz, Paradigm, Ribbit Capital and Union Square Ventures.

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