Foxconn's Gou said to invest in US crypto merchant bank venture

February 09, 2018 11:47
Foxconn's Terry Gou is reported to among those who invested in a cryptocurrency merchant bank being launched by a former Wall Street macro trader. Photo: Bloomberg

Terry Gou, the billionaire chief of Taiwanese electronics giant Foxconn, is said to have invested in a cryptocurrency merchant bank being set up by Mike Novogratz, a former Wall Street macro hedge fund manager.

Citing a source familiar with the matter, Bloomberg reported that Novogratz has raised about US$250 million for his cryptocurrency merchant bank venture through a private placement. 

Foxconn's Gou is among those who took up some shares, according to the report.

Novogratz was able to raise capital for his firm, Galaxy Digital, even as bitcoin and other crypto units suffered steep falls in prices recently after a stupendous rally last year.

His New York-based merchant bank plans to trade crypto as well as make principal investments, manage assets for other clients and provide advice on blockchain-related ventures, according to Bloomberg.

Investors committed to buy shares of the firm through a holding company that eventually will trade on Toronto's TSX Venture Exchange, the report said.

According to Bloomberg, Galaxy is raising money privately as part of a series of transactions that will allow it go public without disclosing financial statements. The process also involves a reverse takeover of a Canadian shell company, Bradmer Pharmaceuticals.

In a Twitter post in December, Novogratz, a former Goldman Sachs partner and an ex-Fortress fund manager, outlined his ambition to build a "Goldman of crypto".

"Galaxy is building out a full-fledged crypto merchant bank. I have over 30 percent of my net worth in crypto assets. We have venture bets, ICOs, tokens, investments in funds, mining and advisory. We also trade very actively. We are making a large long term bet on crypto," he wrote.

With regard to the latest share placement, the terms and amount of funding from individual investors, including Foxconn chairman Gou, are not known.

Also, it is unclear whether Gou participated in the funding round via Foxconn or used his personal capital.

Foxconn, a contract manufacturer for several top global electronics firms including Apple, has been investing in blockchain-related concepts.

Last year, a subsidiary launched Chained Finance, a blockchain-powered supply chain platform with Dianrong, a Chinese online P2P marketplace lending firm.

In October, Foxconn's venture capital arm HCM International announced an investment in Abra, a bitcoin remittance service startup.

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