SoftBank-backed fintech DriveWealth is adding crypto to take on Coinbase’s 'unsustainable’ fees

cnbc.com:

DriveWealth, the SoftBank-backed start-up that helps fintech firms like Revolut offer stocks, is getting into cryptocurrency trading, CNBC has learned.

The New Jersey based start-up, valued at $2.85 billion in a recent fundraising, is acquiring a crypto firm founded by Harvard-trained quants and launching two subsidiaries to handle and execute trades, according to DriveWealth CEO Bob Cortright.

Unlike consumer-facing firms like Coinbase or Robinhood, DriveWealth is a behind-the-scenes player. It has helped to popularize fractional trading by allowing partners like Revolut and Block's Cash App to offer their users slices of stock. DriveWealth says it has more than 100 partners around the world with a cumulative 15 million investors.

The start-up, founded in 2012 by Cortright, has been an under-the-radar beneficiary of the retail trading boom. DriveWealth surged from a reported $200 million valuation in 2020 to $2.85 billion in August, backed by investors including SoftBank's Vision Fund, Point72 Ventures and Insight Partners.

Its acquisition of Crypto-Systems will allow DriveWealth to begin offering bitcoin and ethereum trading to partners in April or May, said Cortright. By owning an end-to-end crypto trading system, including an algorithmic trading platform, the CEO said he hopes to bring greater transparency to digital assets markets, which trade 24-7 across a fragmented global network of independent exchanges.

«In the crypto space right now, it's still the Wild West, prices are all over the place,» Cortright said. «There's very little price discovery and there's little consistency with spreads. We want to change that.»

Cortright is a former currency trader who helped create several electronic trading platforms,