FTX Exchange’s $150M Deal for Mobile-First Blockfolio Is a Retail Trading Play

Cryptocurrency derivatives exchange FTX has acquired Blockfolio, the market’s leading mobile news and portfolio tracking app, for $150 million. The price was paid in cash, crypto and equity, the companies told CoinDesk.

Formally announced Wednesday morning in Asia, the deal is a strategic play for FTX, whose clientele consists largely of quants and professional traders, to attract more retail customers.

• FTX isn’t “just acquiring the intellectual property,” FTX CEO Sam Bankman-Fried told CoinDesk. “It’s an ‘acquire for the synergy and scale up’ sort of deal.”
• The combined company aims to “build a new standard for quality in retail trading experiences,” said Blockfolio CEO Ed Moncada.
• Thanks to the resources and expertise coming from FTX, the deal positions both teams to “open the door for more of a mainstream, mobile audience” in the cryptocurrency industry, said Paul Veradittakit, Blockfolio board member and co-investment officer at Pantera Capital. His firm was a co-lead on Blockfolio's Series A round.

Nine months ago, the companies began discussing plans to build a retail-focused cryptocurrency product together. Those discussions eventually morphed into merger talks.

• “FTX checked every box we were looking for in a partner,” Moncada told CoinDesk. “They understood the vision of what we wanted to build.”
• The acquisition was primarily negotiated by Moncada and Bankman-Fried, who also runs quant trading firm Alameda Research.
• Santa Monica, Calif.-based Blockfolio was advised throughout the process by Spartan Group, a boutique advisory firm specializing in blockchain and related industries, and Mike Novogratz’s merchant bank Galaxy Digital, Moncada told CoinDesk.

Related: ConsenSys Acquires JPMorgan’s Quorum Blockchain

Even as one of the newest exchanges, FTX has grown at warp speed since its founding last year.

• The exchange, based in the Caribbean state of Antigua and Barbuda, ranks first by order-book liquidity and seventh by 24-hour volume, according to CryptoWatch.
• Founded in 2014, Blockfolio boasts more than 6 million cumulative downloads. Its news and portfolio tools average more than 150 million impressions each month.

The deal appears to be the sixth-largest acquisition in crypto sector history.

• It ranks ahead of the Tron Foundation’s acquisition of BitTorrent ($125 million) and behind Lightyear.io’s merger with Chain, the deal that formed Interstellar ($350 million).
• Binance reportedly paid $400 million for CoinMarketCap, which, if true, would put it in a three-way tie for first place with Circle’s 2018 takeover of Poloniex and NHMX’s purchase of an 80% stake in Bitstamp.

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