Crypto M&A Activity Accelerates at Warp Speed in 2021
As cryptocurrencies continue to move to the forefront of the financial system, ease of access has become a paramount priority for companies in the sector and customers alike. The critical first step of converting fiat currency into crypto is the beginning of a potentially exciting journey for someone expanding their crypto holdings or making their first investment. With multinational financial services like Visa and Mastercard processing these transactions in partnership with on-ramp processors, the process is easier than ever. Not only has this made customers’ crypto experience smoother, but it has accelerated the adoption of crypto and broadened the market. Even the US Federal Reserve is jumping on the crypto bandwagon, with Chairman Jerome Powell recently citing the possible benefits of cryptocurrencies and “stablecoins.”
Crypto’s increasing presence in mainstream markets has continued to attract significant investor interest, with the value of mergers and acquisitions (M&A) in the crypto sector more than doubling in 2020 to $1.1 billion. And 2021 “is already on track to significantly surpass it from every single metric,” according to PwC global crypto leader Henri Arslanian thanks to large investors, institutional players and cash-rich crypto platforms. According to PwC, the crypto market is increasingly expanding and gaining widespread endorsement from large investors worldwide and is expected to become “more institutionalized” at some point.
Some of the most notable deals in the crypto space in 2020 include major crypto exchange Binance’s acquisition of CoinMarketCap, which was valued at $400 million, and Coinbase’s $41.79 million acquisition of Tagomi, a New York-based crypto brokerage. But this year is proving to be even more exciting as fiat-to-crypto gateways are getting gobbled up.
On-Ramp M&A Activity Heating Up in May
In late March, Visa announced that it would begin accepting payments in the cryptocurrency USD Coin directly. Visa’s press release came on the heels of Mastercard’s recent announcement that it would soon begin facilitating crypto transactions. Since Visa and Mastercard started to support cryptocurrencies, it created a surge in M&A activity in the on-ramp space.
Perhaps, the most active company has been TechX Technologies Inc., a publicly traded company listed on the Canadian Securities Exchange (CSE:TECX) (OTC:TECXF) (FRA: C0B1). TechX acquired fiat-to-crypto gateway Xport Digital for C$5 million on May 3rd. On May 24th, the Company just announced the signing of a definitive agreement to acquire Mobilum, a fintech company with fiat-to-crypto payment processing technology and a digital wallet, for C$16 million.
Mobilum’s simple-to-use on-ramp solution makes integration easy for businesses whose users buy and sell cryptocurrencies with credit and debit cards. Mobilum guarantees zero chargebacks and claims that they have the highest acceptance rates, and the lowest transaction fees in the industry at 2.99%.
At present, Mobilum’s daily processing volume ranges from C$100,000 to C$250,000 in transactions for cryptocurrency exchanges that include KuCoin, the sixth largest cryptocurrency exchange in the world. Supporting over 200 cryptocurrencies and 80+ fiat currencies, Mobilum’s payment gateway services are accessible to over 8 million global users.
“With very few exchanges offering credit card processing, we’ve seen an exponential increase in demand from exchanges and cryptocurrency businesses to utilize our on-ramp solution,” said Wojtek Kaszycki, CEO, Mobilum. “By merging with TechX, Mobilum will be able to increase its liquidity, giving us the ability to process millions of dollars in transactions per month.”
On May 7, payment processing giant Nuvei Corp. entered into a definitive agreement to acquire fiat cryptocurrency gateway Simplex in an all-cash deal valued at $250 million. Simplex is a fintech startup that pioneered the first riskless global fiat onramp using a credit and debit card and a Visa network member.
As more exchanges, wallets, DeFi services, and institutions implement on and off-ramp payment processing technologies, this sector could see a significant uptick in M&A activity in the near future.Source