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.

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.