FTX Exchange Acquires Blockfolio for $150 Million
The cryptocurrency derivatives exchange, FTX, has acquired the leading portfolio tracking and mobile news app in the market called Blockfolio for $150 million. The company revealed that the price was paid in the form of crypto, cash, and equity. The deal was announced formally in Asia on Wednesday morning and is a strategy play for the exchange, whose clientele comprises of professional traders and quants. It is now hoping to attract retail traders with this move. CEO Sam Bankman-Fried said that FTX just wasn’t acquiring the intellectual property, but this acquisition was more for scaling up and synergy.
Ed Moncada, the CEO of Blockfolio, said that the aim of the combined company would be to establish a new standard for delivering quality in retail trading experiences. According to Paul Veradittakit, FTX would be providing expertise and resources from its end and with this deal, both of the teams will have the opportunity of opening the door for a more mainstream mobile audience within the crypto industry. He is the co-investment officer at Pantera Capital and also a member of the Blockfolio board. His company was the co-leader on the Series A round at Blockfolio.
The two companies had gotten together nine months ago to discuss plans of developing a retail-centered cryptocurrency product. However, these discussions eventually evolved into merger talks. Moncada said that FTX ticked every box that they had been looking for in a partner. He added that the derivatives exchange fully understood their vision and what they were interested in building. The negotiations of the acquisition were primarily made by Moncada and Bankman-Fried, with the latter also running a quant trading firm known as Alameda Research.
As per Moncada, his Santa Monica, California-based Blockfolio was also advised by several parties throughout the process. These include a boutique advisory firm called Spartan Group, which specializes in blockchain and related industries, along with Galaxy Digital, the merchant bank belonging to Mike Novogratz. Even though FTX is one of the newest exchanges as it was founded just last year, but it has grown at warped speed. Located in the Caribbean state of Antigua and Barbuda, the exchange ranks seventh by 24-hour volume and has the first position in terms of order-book liquidity. This information is provided by CryptoWatch.
Blockfolio, on the other hand, was founded in 2014 and it has more than 6 million cumulative downloads to its name. Its portfolio tools and news average more than 150 million impressions on a monthly basis. The deal seems to be the sixth-largest acquisition in the history of the crypto sector. It is ahead of the acquisition of BitTorrent by the Tron Foundation for $125 million and behind the merger of Chain and Lightyear.io worth $350 million, which resulted in the formation of Interstellar. According to reports, Binance had paid a whopping $400 million for acquiring CoinMarketCap.
If this is true, then it would be a tie for first place with NHMX’s acquisition of 80% stake in Bitstamp and Poloniex’s takeover by Circle in 2018.