money

Cryptocurrency exchange Coinbase has internally valued itself at approximately $8 billion, sources familiar with the company’s recent acquisition of paid messaging startup Earn.com say.

According to Recode, Coinbase assigned itself an $8 billion valuation in its offer to Earn, which included an equity package that distributed shares of the exchange operator’s common stock to Earn investors.

Coinbase has not discussed the terms of the Earn deal publicly, though Earn CEO Balaji Srinivasan said that, in addition to profits already distributed, the buyout had provided investors with a positive return on the more than $120 million they had invested in the company over the years.

In any case, the report indicates that Coinbase believes its value has exploded by several hundred percent in just a single calendar year.

Coinbase became the first “cryptocurrency unicorn” last summer when a funding round pegged its valuation at $1.6 billion. However, the company has experienced breakneck growth in the months since closing that investment round and reportedly brought in $1 billion in revenue during 2017.

This growth was largely — though not exclusively — due to a fourth-quarter cryptocurrency rally that was so pronounced that many exchanges paused new user registrations for months while they scrambled to scale up their internal operations.

According to the publication, brokers have approached existing Coinbase investors offering to buy their shares at prices that would value the company between $4.5 billion and $6 billion.

However, neither these offers nor Coinbase’s internal numbers are official, and Recode notes that the company may undergo a formal 409a valuation — which will be conducted by a third-party auditor — in the near future since it has recently acquired Earn and several other smaller startups.

Though best known for its cryptocurrency exchange and brokerage platforms, Coinbase has recently begun to branch out its product line. Earlier this year, the firm launched a cryptocurrency index fund for accredited investors, and more recently it announced its first venture capital fund.

Featured Image from Pixabay

earn.com

Coinbase is quickly ramping up its merger and acquisition operations, as the cryptocurrency exchange and brokerage giant announced on Monday that it has completed its second acquisitions in as many weeks: bitcoin startup Earn.com.

The paid messaging platform — which was originally incarnated as a bitcoin mining startup called 21.co — rewards users with cryptocurrency for answering emails, filling out surveys, and completing other micro-tasks.

Terms of the deal were not made public, but Earn.com CEO Balaji S. Srinivasan wrote in a blog post that “the total value of cash, cryptocurrency, and equity returned to our shareholders is now in excess of the capital invested in the company.”

The company had raised approximately $116 million over multiple funding rounds and at one point was the industry’s best-funded startup. Sources close to the discussions had previously said that the deal would likely exceed that figure, and this comment suggests that it was at least in the same ballpark.

Srinivasan will join Coinbase as a senior executive, becoming the company’s first chief technology officer, while the rest of the Earn.com team will also join the firm and work to integrate the company’s paid messaging platform into Coinbase’s infrastructure.

“If we’re successful in our long-term goals, we will be able to turn the billions of smartphones worldwide into a new source of work. Open the Earn.com app in any country — and receive a personalized, targeted list of paid microtasks and emails just for you,” the company wrote in a blog post. “Thanks to the blockchain, anywhere there’s a phone, there’s a job.”

The acquisition was the second announced by Coinbase in April alone.

As BlockExplorer reported, Coinbase announced last week that it had acquired Cipher Browser, a one-man startup that had built a mobile ethereum wallet and decentralized application (DApp) browser. Cipher’s developer, Peter Kim, joined the company as the engineering team lead for Toshi, Coinbase’s ethereum wallet and DApp browser.

Featured Image from Earn.com/Twitter

coinbase

Cryptocurrency exchange and brokerage giant Coinbase is rumored to be engaged in discussions to acquire bitcoin startup Earn.com.

Citing sources close to the situation, CoinDesk reports that the San Francisco-based Coinbase — which reportedly garnered more than $1 billion in revenue last year — is engaged in discussions to acquire Earn.com, a cryptocurrency-based paid messaging platform.

Earn.com — formerly 21.co — allows users to earn bitcoin by answering emails or completing tasks (such as registering for a token airdrop). Conversely, users can utilize the service to pay for prominent individuals or subject matter experts to read and respond to their emails, which would likely otherwise be ignored.

The sources cited in the publication gave wildly-varying estimates about how much Coinbase — or one of the other companies interested in acquiring Earn.com — would end up paying for the startup. One said it could go for as little as $30 million, while another “who is directly involved in the discussions” claimed that the total value of the acquisition — which could include a compensation package comprised of cash, cryptocurrency, stock, and earn-out — would probably exceed $120 million.

While the purchase is far from a done deal, the news that Coinbase is seeking to leverage its capital to expand through acquisitions does not come as a surprise.

Indeed, despite the fact that Coinbase has historically made few acquisitions, rumors about potential deals have abounded since the firm hired Emilie Choi — LinkedIn’s former head of mergers and acquisitions — as its new vice president of corporate and business development.

Choi oversaw more than 40 such deals before leaving LinkedIn earlier this month, and she has signaled that she intends to keep busy now that she has taken the reins at Coinbase.

“There are a lot of great pre-IPO companies, or even the tech titans, that are not so heavily involved in M&A right now,” she told tech publication Recode. “Coinbase actually is in a position to do a lot of M&A.”

Featured Image from Pixabay