Acquisitions and Investments Pour in For Crypto-Facing Companies

This year, the cryptocurrency space has gotten a great deal of legitimacy, following an influx of entry from major players and more. Assets started the year with strong price movements, with many people seeing significant gains.

Acquisitions and Investments Pour in For Crypto-Facing Companies

Even despite the market downturn in May, crypto prices are still trending mostly up on the year. Now that the bear market is starting to wear off, several players have looked at crypto as the next frontier once more. This has benefited companies with affiliations to crypto as new investments have flooded in.

Exchanges Finding Their Footing

Everywhere you look in the crypto industry, there is money coming in. Companies looking to usher in the crypto revolution are swimming in cash as big investors understand the need to push the crypto agenda forward.

When new funding comes, several companies tend to be first in line to get it. These include crypto exchanges, with Luxembourg-based exchange Blocktrade announcing that it had closed its Series A funding round earlier this month. As Blocktrade confirmed, it raised $25.8 million from investors. The firm refused to reveal the investors’ identities, although it said that the funding will be focused on improving its internal operations - especially with market-making, fiat onramps, and security.

“Blocktrade is more than a classic crypto exchange: We are building a complete ecosystem around digital assets, which provides our users with much more than just access to trading tools,” said company chief executive Bernhard Blaha.

Blocktrade is just the latest upcoming exchange to get big bucks from investors. Back in July, Mercado Bitcoin, a Latin American crypto exchange, secured $200 million in funding from none other than SoftBank. Like Blocktrade, Mercado Bitcoin said that it would use the funds to expand its offerings and invest in new ventures to meet the demand for cryptocurrencies in its target market.

Then, there is CoinCDX, an Indian crypto startup that recently secured $90 million in its Series C funding round. CoinCDX is now a unicorn with a valuation of $1.1 billion. The exchange is the first in India to reach unicorn status, and it has become the most valuable exchange in the country as well.

Money for Taxes

Moving away from exchanges, investments have also flowed into other aspects of the industry. TaxBit, a crypto tax startup, secured a $130 million Series B funding round this month. The company explained that it would use these funds - which valued it at $1.3 billion - to scale up its services and open offices in countries like the United Kingdom.

The Series B funding round came just five months after TaxBit raised $100 million in its Series A round. The company had anticipated that the funds from the previous round would help to kick off its expansion into the United Kingdom. TaxBit already has an office in Washington, and it is also working on offering crypto-related data analysis and tax calculator support for crypto holders through the Internal Revenue Service (IRS).

Speaking at a YouTube videocast, Austin Woodward, TaxBit’s chief executive, explained that the company had seen the implementation of new crypto tax reporting requirements coming from the United States government. He explained that crypto taxes are the most important priority for regulators as far as the industry is concerned. So, TaxBit’s role is to help holders and investors to navigate the landscape.

Polygon Takes a Bold Leap Forward

Another move that is gaining momentum is crypto companies moving into acquisitions in order to grow. Last week, Polygon, a popular layer-two blockchain scaling protocol, acquired ZK-rollup project Hermez Network for $250 million.

The deal, which was completed using MATIC tokens, means that Hermez will become a part of Polygon’s suite of solutions. Its name will also change to Polygon Hermez. Everyone in the Hermez team and all of the company's solutions and tech will be joining Polygon as well. As part of the merger, all holders of Hermez’s HEZ token will be able to exchange them for MATIC at the rate of 3:5:1. Polygon plans to phase these tokens out eventually, although a date for that is yet to be set.

“We believe this is in a way a historical moment since this will be (to the best of our knowledge) the first full-blown merger of two blockchain networks. “[Mergers and acquisitions] in the traditional tech world are an everyday thing. In blockchains, however, they are a new and very interesting concept,” Polygon said in its announcement.

No More a Fringe App

Then, there is the biggest of them all. Last week, Reddit, the popular platform where crypto-facing forums have become so popular, announced that it had secured $700 million in its Series F funding round. The round, which is led by Fidelity Management and Research Company LLC, will see Reddit gain an astounding $10 billion valuation.

This is just six months after Reddit raised $250 million in its Series E round, valuing it at $4 billion. Reddit has been especially popular this year, following the GameStop saga and several other operations from investors who pumped stock prices - including cryptocurrencies.

It is an interesting time to be in the crypto industry right now. Companies are swimming in the cash as investors see crypto as the new gold rush.


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