Brian Nichols is the co-founder of Angel Squad, a community where you’ll learn how to angel invest and get a chance to invest as little as $1k into Hustle Fund's top performing early-stage startups

Kraken did $2.2 billion in revenue in 2025 and turned a real profit doing it. For a crypto exchange that posted a $76 million loss as recently as 2023, that's a serious turnaround. It's also why Kraken pre-IPO shares keep showing up on secondary platforms and in investor group chats.

But here's the part that should make you slow down. The last primary round priced Kraken at $20 billion. Secondary shares have been trading closer to $35.81, which works out to about 42% below that mark. A fast-growing, newly profitable company trading at a steep discount to its own last round is a puzzle worth solving before you buy, not after.

This guide is for the accredited investor sizing up private-market exposure, not someone waiting for a ticker. You already know how crypto exchanges make money. What you need is the entry math, the structure of what you're actually buying, and the questions that separate a good price from an expensive one. Late-stage names tend to stay private longer than people expect, which changes the whole risk picture. We dug into why startups stay private longer and what it means for your portfolio if you want the broader context.

What Kraken Pre-IPO Shares Are (and What They Are Not)

Pre-IPO shares in a private company are usually existing shares sold by an employee, founder, or early investor in a secondary transaction. They are not publicly traded equity. No ticker, no continuous pricing, no automatic liquidity.

The primary-versus-secondary distinction matters. A primary round issues new shares and puts cash on the company's balance sheet, which often resets the valuation and the rights package. A secondary sale just transfers ownership between private parties. It funds someone's liquidity, not Kraken's operations, and it usually reflects bargaining power and information gaps more than any fresh view of the company's worth.

So drop the instinct to read a private listing like a public quote. What you're looking at is a negotiated transaction with limited disclosure, transfer approvals, and a meaningfully different risk profile from buying a listed stock.

What Is the Current Valuation of Kraken?

Kraken's last primary valuation is $20 billion, set in its Series D round in November 2025. Citadel Securities led that round at $61.47 per share. That came on the heels of a September 2025 Series C that valued the company at $15 billion ($48.82 per share), so the private marks were climbing fast through late 2025.

Under the hood, Kraken is a crypto exchange that has spent the last two years turning into something broader. It runs spot, margin, and derivatives trading, plus staking, custody, and crypto-as-a-service. It serves over 9 million users across 190+ countries, with 5.7 million funded accounts and $48.2 billion in assets on the platform by 2025. Average revenue per user sits around $2,000 a year, so the customer base skews toward higher-value traders rather than casual retail.

The expansion is the interesting part. Kraken now offers tokenized U.S. equities through xStocks (over $25 billion in volume and 100 tokenized names, targeting 500+ by year-end 2026), commission-free trading of 11,000+ U.S. stocks for American users, and a peer-to-peer payments app called Krak. In March 2026 it was approved for a Federal Reserve master account, making it one of the first crypto-native firms with direct access to Fed payment rails. That's a genuine structural advantage that most competitors can't replicate quickly.

How Does Kraken Generate Revenue?

Kraken makes money primarily on transaction fees, taking a percentage of each trade, with rates that drop as monthly volume rises. Total platform transaction volume hit roughly $2.0 trillion in 2025.

The more durable story is diversification. By 2024, only about 47% of revenue came from trading fees. The rest came from asset-based and other streams: custody, staking yield (Kraken takes a cut of the rewards), payments, and financing. That mix matters because trading revenue is violently cyclical, while asset-based revenue scales more steadily with assets on the platform. Recent acquisitions (NinjaTrader, Small Exchange, Bitnomial) extend Kraken into regulated U.S. futures on the same compliance and tech rails, so each new product adds throughput without rebuilding the stack.

Why Are Investors Bullish on Kraken?

Start with the thing almost no other pre-IPO name can claim: profitability. Kraken's adjusted EBITDA went from negative $76.5 million in 2023 to $420.7 million in 2024 to roughly $531 million in 2025, a ~24% margin. When you're underwriting a secondary, an earnings floor changes everything. You can sanity-check the price against actual cash generation instead of betting purely on the growth curve holding up.

The platform expansion described above (tokenized equities, commission-free U.S. stocks, the Krak payments app, regulated derivatives, and Fed rails) widens the addressable market well beyond crypto trading. And the SEC dismissed its enforcement action against Kraken with prejudice, lifting a regulatory cloud that hung over the whole category.

Our very own Hustle Fund GP, Elizabeth Yin, has talked about how in hyped-up markets, differentiation is everything. A company needs to be 10x different and 10x better than not just direct competitors, but every alternative a customer might choose. Kraken's bet is that owning the regulated, multi-asset rails (crypto plus equities plus payments plus Fed access) is that differentiator. It's a credible bet. It's also not settled, because the competition is enormous.

What Are the Biggest Risks for Kraken Investors?

The two company-level risks are revenue cyclicality and competitive position. Both deserve weight.

Revenue rides the crypto cycle. This is the one the headline growth number hides. Kraken did $1.01 billion in 2022, then fell 31% to $686 million in 2023, then snapped back 138% in 2024 and grew 33% to $2.2 billion in 2025. Trailing-twelve-month revenue was recently estimated around $2.15 billion, slightly down year over year. You are not buying a smooth SaaS curve. You're buying a high-beta exposure to crypto trading volume and market sentiment, and that sentiment can reverse fast.

Kraken is a strong number-three, not the leader. Crypto exchanges show winner-take-all dynamics, where liquidity attracts more liquidity. Binance holds roughly 41% of spot market share. Coinbase owns the U.S. institutional and compliance-first niche. Kraken sits in the middle by volume, which is a fine place to be in a growing market and a dangerous one if institutional flow consolidates onto fewer platforms. On top of that, the company is integrating several large acquisitions at once while reportedly cutting 150 to 170 staff ahead of an uncertain IPO. That's a lot of moving parts at a critical moment.

The Risks Investors Underprice: Liquidity, Information, and Dilution

Company risk gets the attention. Structural private-market risk is what actually shows up in your returns.

Liquidity is the big one. Kraken filed a confidential S-1 in November 2025, then Reuters reported in March 2026 that the IPO was put on hold pending better market conditions. Kraken didn't confirm the report, but the takeaway for a buyer is the same: there is no committed timeline. Plan for a multi-year hold and the possibility that interim liquidity, if it comes at all, arrives through tender offers rather than a listing.

Information asymmetry is structural. Private companies don't file public quarterlies. You're often buying common stock from someone with far better visibility into the business than you have, and that gap is the entire reason the trade exists. One concrete signal here: on Notice, buy demand is currently lighter than the supply of shares on offer. That doesn't tell you the company is bad. It does tell you sellers want out more than buyers want in, which is exactly when price discipline pays off.

As Elizabeth Yin puts it, valuations were never really about the "worth" of a company. They're about the supply of shares and the demand of investors. In private markets that's even more true, because there's no continuous market to keep price and fundamentals tethered. The $20 billion mark and the $35.81 secondary print are both real. They just answer different questions.

Is Kraken Overvalued at $20 Billion?

Here's the math, which is the part that actually matters.

Entry price versus the last round. The Series D priced at $61.47 in November 2025. Secondary shares have traded around $35.81, roughly 42% below that primary mark and about 27% below the September 2025 Series C price of $48.82. For a profitable company growing 33%, a discount that wide is a question, not a gift. It can reflect common stock rather than preferred, weaker information or transfer rights, a thin pool of buyers, or simply a cooler crypto tape. A disciplined buyer figures out which one applies before assuming "discount equals deal."

Revenue multiples. At the $20 billion last-round valuation against $2.2 billion in 2025 revenue, you're paying roughly 9x trailing revenue. At the secondary market cap of about $11.65 billion, that compresses to roughly 5.3x. Notice pegs the price-to-sales ratio around 6.2. Annualizing the $507 million reported for Q1 2026 gets you near a $2 billion run rate, so the forward multiple isn't much different from trailing, because growth has cooled. The multiple isn't getting bailed out by acceleration the way it would in a company doubling revenue.

The peer check. Kraken's cleanest public comparable is Coinbase, the listed crypto exchange. That's the apples-to-apples anchor for whether ~5x secondary or ~9x last-round is rich or cheap, so pull Coinbase's current revenue multiple before you transact and compare like for like. The general principle is the same one we lay out in our data-driven approach to startup valuation: anchor the number to comparables and to the underlying economics, not to the headline.

The earnings floor. Because Kraken is profitable, you can run a second check most pre-IPO names don't allow. At the secondary market cap, you're paying roughly 22x adjusted EBITDA; at the last round, closer to 38x. That's a far more grounded conversation than valuing a pre-revenue or pre-profit company, and it's the single biggest thing that distinguishes a Kraken secondary from, say, a frontier-AI secondary.

The Diligence That Actually Matters: Terms Every Buyer Should Understand

The myth in pre-IPO secondaries is that a price below the last round means you got a discount. Seasoned buyers know that gap often reflects share-class differences, liquidation-preference stacking, or transfer restrictions that change what you actually own. The real diligence isn't the headline valuation. It's the cap-table position and the legal structure of what's being transferred. How deep you go should scale with your check size, a point we cover in how much diligence your check size actually requires.

The terms that drive your outcome:

• Share class. Common or preferred. Two investors at the same valuation can face wildly different economics. Many secondaries are common stock sitting behind a stack of preferred.
• Liquidation preference. The payout priority preferred holders get before common sees a dollar. In a middling exit, common can be wiped while preferred recovers principal or more.
• Fully diluted ownership. Your percentage assuming all options, warrants, and convertibles convert. It's the only honest way to read your stake.
• Information rights. Whether you get financials and updates after you buy. Common holders often get none, which means you're holding a position you can't monitor.
• Pro rata rights. Whether you can defend against dilution in future rounds. Most secondary buyers of common don't get these.
• ROFR and transfer restrictions. Company consent rights that can block or match your deal even after you've signed. A signed purchase agreement is not ownership.
• 409A valuation. The independent tax valuation, which can sit well below a negotiated secondary price because the two solve different problems.
• Lockup. Post-IPO selling restrictions, usually 180 days. Your liquidity event isn't the IPO, it's the lockup expiration.

If a seller or platform can't explain these clearly for the specific shares on offer, treat that opacity as a risk signal in itself.

Deal Mechanics: Direct Secondary, SPVs, and Forward Contracts

How you get exposure is as important as what you pay. There are three common structures, and they are not equivalent.

Direct secondary. You take ownership of the actual transferred shares, subject to company approval. Kraken allows direct stock transfers, which is genuinely useful. It means you can, in principle, hold the real security rather than a synthetic wrapper. This is the cleanest path when it's available.

SPVs (and the nested-SPV trap). An SPV pools investors into one vehicle that holds the shares. It simplifies administration but adds a fee layer, reduces your governance, and limits visibility into the underlying terms. The thing to watch for is a second- or third-layer SPV: a vehicle that holds an interest in another vehicle that holds the shares. Each layer stacks management fees and carry, and each one puts more distance between you and the cap table. By the time you're two SPVs deep, you may have no idea what share class or rights actually sit at the bottom. If you're weighing pooled structures, our breakdown of angel groups vs. syndicates vs. VC funds is a useful primer on how these vehicles differ.

Forward purchase contracts. Here you're not buying shares at all. You're buying a contractual promise that a seller will deliver shares (or their value) at a future liquidity event. You get synthetic exposure with no actual ownership until the IPO or an approved transfer, which means you carry counterparty risk: if the seller defaults, can't deliver, or the company blocks the transfer, you're holding a claim rather than a stock. Given that Kraken permits direct transfers, ask hard why a deal is being papered as a forward instead.

Whatever the structure, your all-in cost is rarely just the share price. Add the spread, platform fees, broker-dealer commission, legal review, admin, and any SPV overhead. In thin private markets, that fee stack can turn a decent entry into a mediocre one before the company's value changes at all. And an indication of interest is not an allocation. Deals fall through for boring reasons (unclean title, blocked transfers, terms shifting after the IOI), so don't anchor until cash and shares actually settle.

Eligibility and Compliance

Most direct private-market offerings are limited to accredited investors. Qualified-purchaser status can matter when a deal is packaged through a pooled fund, since that higher threshold often dictates which structures a manager can use. Regulation D frames how these deals are offered: Rule 506(b) limits solicitation and leans on existing relationships, while 506(c) allows broader marketing but requires verified accreditation. The KYC, AML, source-of-funds checks, and broker-dealer involvement aren't friction for friction's sake. They exist because private securities carry fraud and suitability risks that are harder to spot without public-market transparency.

Where Accredited Investors May Access Kraken Shares in 2026

Access tends to come through a few channels, each with different mechanics and rights.

• Secondary platforms. Hiive, Forge Global, EquityZen, Notice, and UpMarket regularly list names like Kraken. Pricing varies by platform, so compare quotes and read the share class and transfer terms before transacting.
• Pre-IPO funds. Diversified vehicles hold crypto and fintech positions, giving you exposure without the ability to size into Kraken specifically.
• Public proxies. Coinbase gives you liquid, zero-friction exposure to the same crypto-exchange theme, just diluted across a different business and balance sheet.
• Angel syndicates and investing communities. These occasionally surface SPV access to growth-stage and pre-IPO deals for investors who've built the right relationships. Co-investing alongside an established fund can be a real backdoor into flow you couldn't source alone, which we cover in co-investing with a VC fund as an individual.

How This Differs From Early-Stage Venture Access

Late-stage secondaries behave differently from early-stage venture deals. Pattern recognition from the worlds of AngelList, SeedInvest, Y Combinator, and 500 Startups teaches you to read founders and product-market fit, which is genuinely valuable. But a $20 billion crypto secondary is a different animal. You're underwriting price, share class, and liquidity, not a founder bet. The muscle is related (read the cap table, ask sharp questions, size the position), but the inputs are not.

This is exactly where a community that spans the full stage spectrum earns its keep. Hustle Fund is an early-stage fund, but Angel Squad members get access to deal flow running from pre-seed all the way through pre-IPO, including late-stage secondaries in names of this caliber. It's a global community of 2,500+ members across 50+ countries who've collectively put $30M+ into 70+ startups, with a strict no-a-holes policy and education built in so you're not learning the cap-table lessons the expensive way. If you want to see how a full-spectrum portfolio comes together (and how late-stage exposure fits alongside early-stage bets), you can learn more about Angel Squad here.

Liquidity, Lockups, and Exit Paths

Private shares can exit through an acquisition, tender offer, direct listing, conventional IPO, or simply staying private longer. Each produces different timing and returns. With Kraken's IPO reportedly on hold as of early 2026, the honest base case is a multi-year hold with the chance that liquidity arrives through a tender or secondary window before any public listing.

Position sizing matters more than conviction in assets this illiquid. Timing, dilution, and liquidity uncertainty can swamp even a strong company thesis, which is why a single private name should be one slice of a deliberately constructed portfolio. We get into the mechanics of that in building an anti-fragile angel portfolio.

Bottom Line

Kraken is one of the more interesting pre-IPO names out there right now, and for an unusual reason: it actually makes money. Profitability gives you an earnings floor to underwrite against, the platform expansion into equities, payments, and Fed rails is real, and the secondary discount to the last round is large enough to be worth understanding.

But the same discount, the lighter buy demand, the decelerating and cyclical revenue, and the stalled IPO all point in the same direction. This is a name to enter with discipline, not enthusiasm. Whether it's a good investment for you depends less on what you think of Kraken and more on how you enter it: the right share class, a defensible price, a clean structure, and a position size that assumes a long, uncertain hold. Read the documents, anchor the multiple to Coinbase and to EBITDA, and stay allergic to the narrative. Structure matters here as much as the story.

Frequently Asked Questions

Is Kraken publicly traded? No. Kraken (Payward, Inc.) is a private company with no ticker symbol. Accredited investors can access shares through secondary platforms like Hiive, Forge Global, EquityZen, and Notice, through pre-IPO funds, or through angel investing communities that occasionally surface SPV access to late-stage deals.

What is Kraken's current valuation? Kraken's last primary valuation is $20 billion, set in its November 2025 Series D round led by Citadel Securities at $61.47 per share. On the secondary market, shares have recently traded around $35.81, implying a real-time market cap closer to $11.65 billion.

Is Kraken profitable? Yes. Kraken reported roughly $531 million in adjusted EBITDA in 2025 (about a 24% margin), up from $421 million in 2024 and a loss of about $77 million in 2023. That earnings base is unusual among pre-IPO companies and lets investors value the company on cash generation, not just growth.

How much revenue does Kraken generate? Kraken did about $2.2 billion in revenue in 2025, up 33% year over year, on roughly $2.0 trillion of platform trading volume. Revenue is cyclical: it fell 31% in 2023 before rebounding 138% in 2024.

When will Kraken IPO? Kraken filed a confidential S-1 in November 2025, but Reuters reported in March 2026 that the IPO had been put on hold pending better market conditions. There is no committed timeline, so buyers of Kraken pre-IPO shares should plan for a multi-year hold.

How can accredited investors buy Kraken stock? Through secondary platforms (Hiive, Forge Global, EquityZen, Notice), pre-IPO funds, or angel investing communities that source SPV and direct-secondary access. Each path differs on minimums, fees, compliance steps, and information rights. Kraken does allow direct stock transfers, so it's worth confirming whether a deal gives you actual shares or only synthetic exposure through an SPV or forward contract before you commit.