Tag: acquisitions

PwC Reports Huge Shift in M&A and Fundraising from US to Asia and EMEA in 2019

In 2019, crypto fundraising and M&As began migrating over to Asia, Europe and the Middle East and saw a lack of new VC investments as the majority of funding came from crypto firms within the industry, according to PwC’s latest report released on April 6.

PwC Global Crypto Lead, Henri Arslanian discussed the 2nd Global Crypto M&A and Fundraising Report’s findings with Blockchain.News and offered his take on what they mean for the digital ecosystem.

Crypto fundraising and M&A moving to Asia and EMEA 

As outlined in the report, the majority of global crypto fundraising and M&A deals in 2019 took place outside of the United States with increased activity in both APAC (29%) and EMEA (22%) recorded.

In 2019, it was found that traditional VCs, crypto-focused VCs and family offices represented the majority source of new funding, with a share of 57%, for crypto companies. These new findings mean that crypto firms now represent the majority of M&A in the sector which is an increase compared to 2018’s 42%.

Arslanian said, “We expect to see APAC and EMEA play a bigger role in the global crypto fundraising and M&A space. In particular, we expect to see more APAC and EMEA based family offices looking at the market turbulence as a good time to invest in promising crypto companies.”

In total, the number of M&A deals recorded in the report dropped from 189 in 2018 to 114 in 2019, while the actual value of M&A deals plummeted by 76 percent from nearly two billion dollars to just under half a billion. Arslanian commented, “The crypto industry is not immune to the global headwinds and the number and value of crypto fundraising and M&A deals may be impacted in 2020.”

Top 5 Investor Deals in 2019 Compared to 2018Per the report, while 2018 saw traditional VCs andincubators among the top investors, 2019 saw a contrast with the majority of funding provided by crypto-focused incumbents like Coinbase and ConsenSys.Source: 2nd Global Crypto M&A and Fundraising Report

Crypto Companies Offer Complimentary Services to their Core business 

Whilst 2018 saw a lot of crypto fundraising in blockchain infrastructure projects or M&A in the crypto mining space, 2019 saw a rise in investments in solutions for the crypto ecosystem like compliance and regulation; as well as M&A activity in the crypto service providers.

 “We expect to see further consolidation in 2020 with some of the larger or more profitable players acquire firms that offer ancillary services to their current offering in areas like crypto media, research or even compliance,” said Arslanian.

PwC’s Global Crypto Team  

These latest insights come from PwC’s Global Crypto Team which has continued to lead research in the space since its inception. Henri Arslanian discussed the ever-growing role of his team in interview with Blockchain.News in January.

   

In the last 2 years, PwC has conducted over 320 crypto engagements globally, spanning across 15 different countries. “I think it’s very exciting to see how PwC is getting involved in the crypto ecosystem,” said Arslanian. “Our purpose is to build trust in society and solve important problems and there is a big need for that in the crypto and blockchain ecosystem. We set up this PwC crypto team almost three years ago as the crypto ecosystem was growing, to support crypto firms not only on areas like strategy or fundraising but also on day-to-day functions such as crypto accounting, tax or KYC/AML reviews.” Arslanian believes that firms like PwC are essential for the ecosystem to “go from 1.0 to 2.0,” and “that PwC has a big role to play.”   

Purse.io Not Closed Just Yet, Will Bitcoin Jesus be the Bitcoin Startup's Saviour?

Purse.io may be getting a thrown a life line following their shock announcement last week that they would close their doors after six years of trying to bring serious utility to Bitcoin in retail services.

Eduardo Gomez, Support Manager for Purse.io took to Twitter to share the news that the loyal Purse userbase had been desperately hoping to hear. He wrote, “We are in serious talks to get acquired. Meaning that we will most likely live through this.”

This announcement of a possible acquisition was later confirmed in an official company post on April 23 which read, “ Several parties – including well known bitcoin advocates, high volume users, and established cryptocurrency companies – reached out with interest in acquiring purse.io.”

Mention of the well known Bitcoin advocate has led to speculation that Roger Ver, one of the projects original investors, may be getting involved. In a video posted on YouTube on 19 April, Ver said “Purse is too important for the ecosystem to let disappear. I don’t think it’s going to go anywhere.” Ver also mentioned he has been talking to Purse but so far there has been no concrete confirmation of the Bitcoin Cash king’s involvement.

Purse.io’s bitcoin service launched in 2014 and was slated to usher in mass adoption as it interacted with retail giant Amazon, matching gift card users with bitcoin and bitcoin cash investors. The Purse community has been in a state of shock since the intial announcment to close and it seems they are unwilling to go down without a fight.

Earning Digital Gold

Bringing Bitcoin to everyday consumers may now be more appealing than ever with the release of a new report from international news agency Bloomberg indicating that the COVID pandemic’s shake-out of the stock market may be accelerating Bitcoin’s maturation into a new kind of digital gold. 

Nexo Hires Citigroup to Advise on Potential Acquisitions

Nexo, a crypto lending platform based in Switzerland, announced on Wednesday that it has tapped Citigroup to advise it on the potential acquisition of other crypto firms hit by the recent market downturn.

Antoni Trenchev, co-founder and Managing Partner of Nexo, said: “We have been approached by multiple Wall Street banks and decided to officially explore the opportunities for acquisition to help stabilize our nascent industry.”

Nexo said it hired the banking giant to explore strategic options, including a potential M&A deal within the crypto lending space.

The collaboration came as a result of a bid that saw the banker selected to serve as a financial advisor.

The partnership will enable the two firms to explore the best ways to protect retail investors in the current crypto market turbulence that exposed the cracks in the space, with several businesses staggering towards insolvency.

The lack of liquidity is on a clear display. Nexo feels having a “lender of last resort” – similar to that played by the Federal Reserve – would help crypto lenders and others in the blockchain industry.

Such “lender of last resort” would give room for solvent players to work towards mass consolidation via mergers and acquisitions (М&А), Nexo stated.

Investors Worried About Crypto Winter

The current crypto market conditions have caused lots of anxiety investors to rush for the exits while many firms feel the heat. On 13th June, prominent crypto lending firm Celsius Network froze all account withdrawals, transfers, and swap products citing “extreme market conditions.

A liquidity crisis at Celsius made investors worried about a wider contagion that could bring down other major participants in the market. Celsius was already feeling the pain after the collapse of the $60 billion stablecoin venture Terra. Celsius was an investor in Terra.

Two days later, Nexo announced plans to buyout Celsius, including assets “mostly or fully of collateralized loan receivables secured by corresponding collateral assets.”

Last week, the future of crypto hedge fund Three Arrows Capital appeared hanging in the balance as the firm faced potential insolvency after being liquidated by its lenders. The current difficult crypto market fueled the hedge fund’s plunge. The demise of Terraform Labs’ Luna token the previous month also resulted in huge losses for Three Arrows Capital, which is a huge backer of the Seoul-based crypto company.

Many other crypto firms such as Coinbase, BlockFi and Crypto.com, recently froze hiring and announced job cuts as they reckon with a dramatic downturn in the market and heightened concerns about a weakening economy.

Bankman-Fried’s FTX In Advanced Talks to Acquire South Korea’s Bithumb

FTX, a global cryptocurrency exchange headquartered in the Bahamas, is in talks to acquire its rival Bithumb, South Korea’s leading cryptocurrency exchange, according to people familiar with the matter.

The deal is already in an advanced stage, said the people, who asked to remain anonymous because the discussions are private. Its financial terms are yet to be disclosed.

Amid a series of recent deals, FTX is now talking to Bithumb about a potential acquisition. According to the report, the discussions have been ongoing for several months.

Bithumb has been looking for a buyer since 2018. In October 2018, BK Global Consortium, which is led by renowned cosmetic surgeon Dr. Kim Byung Gun, was on track to acquire Bithumb for $354 million. But the deal was canceled in 2019 because BK chairman Kim Byung-Gun could not pay the whole amount.

In September 2020, Bithumb appointed accounting giant Samjong KPMG to be in charge of its sale, at a price tag of at least $430 million and up to $604 million.

In January last year, South Korean gaming giant Nexon was reportedly preparing to buy Bithumb, for around 500 billion won ($460 million). But Nexon later denied plans to acquire the exchange.

In March last year, US banking giant Morgan Stanley entered into negotiation to acquire Bithumb for up to $441 million. However, the deal never happened.

Meanwhile, FTX has been on the lookout to acquire firms that would help it get more users or regulatory licenses. it is a sign that the firm is big enough and well capitalized to splash the cash on acquisitions.

In 2020, FTX acquired the trading platform Blockfolio which helped it get more customers. In October last year, FTX.U.S acquired LedgerX, a futures exchange that had several licenses from regulators in the U.S. In May this year, FTX was looking to acquire brokerage startups to push further into stock trading.

FTX has been on a buying spree amid the ongoing market plunge. Early this month, Bankman-Fried said his firm has a few billion dollars that it is willing to use to bail out troubled crypto companies.

Earlier this month, FTX reached a deal with BlockFi, which allowed it to acquire the embattled crypto lender at a maximum price of $240 million.

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