Don’t be fooled by the prolonged cryptocurrency bear market, the industry remains a solid investment and is at less risk of being replaced by AI than traditional software-as-a-service (SaaS) operations, according to Ravi Tanuku, CEO of KRAKacquisition Corp. (KRAKU), a blank check company backed by US crypto exchange Kraken.
The company, a Nasdaq-listed special purpose acquisition company (SPAC) sponsored by Kraken with venture firms Natural Capital and Tribe Capital, closed its $345 million initial public offering in January and is now ready to explore deals with crypto-native companies valued between $2 billion and $10 billion, Tanuku said in an interview.
This may seem ironic, given that Payward, Kraken’s parent company, this month delayed its long-awaited initial public offering as crypto markets collapsed: the CoinDesk 20 Index (CD20) is on track for a sixth consecutive monthly decline. Tanuku declined to comment on Kraken’s IPO plans, but said he sees things like stablecoins and payments as the next best story after AI, and cryptocurrencies as a clear survivor amid the complete disruption affecting SaaS companies, which were traditionally part of the IPO process.
The very existence of Saas now appears to be threatened by rapid advances in artificial intelligence and the potential for machines to write code, one of the many areas of skilled labor that AI could undo.
“If you were a SaaS company and you wanted to go public and you didn’t, now you have a bigger problem, which is whether or not you have an answer for AI,” Tanuku said in an interview. “That’s not like cryptocurrencies or bitcoins went from 70,000 to 80,000. It’s a more existential, longer-term issue that is much harder to overcome.”
So if the money not invested in AI is not going into SaaS, does that mean the next step is cryptocurrencies? Not really, Tanuku said. But it does mean that investors are looking for other places to deploy.
“What I would say is that the digital asset theme is probably one of the strongest secular stories in the market after AI… AI is the best story. Nobody is going to deny that,” he said.
So what kind of crypto native opportunities is KRAK looking at? Does it include much in the way of AI crossover?
Tanuku said he is looking for areas where cryptocurrencies and AI naturally intersect. He mentioned the well-documented enthusiasm for AI agent trading and also raised the possibility that tokenization could help fuel AI growth.
“I’m curious if someone doesn’t start floating tokens to figure out how to fund some of this infrastructure, because it’s so expensive to build that there could be interesting ways to provide people with yield and returns in a tokenized way,” Tanuku said.
