Financing-Consolidation-Of-The-Crypto-Industry

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Financing & Consolidation of the crypto industry Year 2020 in review and perspectives Main trends VC Financing M&A activity Global VC deals in crypto (in billion USD) Global M&A deals in crypto (in billion USD) 5.8 1.4 2.9 3.1 0.4 0.7 • Prior to 2018, volumes were only sub $1bn • M&A volumes in crypto are still much smaller than VC in absolute • Size of largest deals is increasing terms, but also in relative terms (the overall M&A industry is 10x the • The 2 main trends for VC investing are Decentralised Finance (DeFi), size of the VC industry) and brokerages & custody. A fully comprehensive and coherent • This is a reflection of the still nascent state of the crypto industry prime-services offer has yet to emerge from all the ongoing projects • Most active segments within crypto have been exchanges, brokerage / custody and data & analytics Transactions highlights 2020 VC main deals 2020 M&A main deals Broader perspective • 774 deals in 2020, $3.1bn total value • 83 deals in 2020, $691m total value Largest ever VC and M&A deals in crypto • Main category: banking & payments • 3 main deals, representing 96% of the $200-250m $300m • Main other themes: brokerage / custody, total, were conducted by centralized $400m+ data & analytics, trading & exchanges crypto exchanges, highlighting the major 4 landmark transactions above $100m role played by these actors • VC Hyperchain RippleLabs Bakkt Bitmain Bakkt Linklogis Bithumb Coinbase $300m – Mar 2020 Bitmain banking & payments Target Coinmarketcap Blockfolio Tagomi $120-140m $150m $400m Ripple Labs $200m – Feb 2020 banking & payments Acquirer M&A Binance FTX Coinbase Paxos BitTorent Blockfolio Coinmarketcap Earn.com Poloniex Bitstamp $142m – Dec 2020 Deal size $400m $150m $75m Poloniex brokerage / custody Date Apr 2020 Aug 2020 May 2020 Over the last 3 years, crypto has Chainalysis • developed as a visible segment within $100m – Nov 2020 Crypto Mobile news Crypto prime data & analytics Segment pricing & portfolio broker+L&B global VC: 1.3% of total VC allocation website tracking app activity • M&A still small (0.02% of overall volumes) Looking ahead Key expected milestones What’s next? • Coinbase (crypto exchange) expected to IPO in first part of 2021. • Significant additional funding will certainly be deployed to the Valuation expected to reach $28bn according to Messari, and up to crypto space. One area that is expected to keep attracting new $70bn according to The Block. This will be a significant milestone for capital, outside of brokerages & custody, is DeFi the nascent crypto industry • One key dimension for the industry to watch will be the development • BlockFi (retail-focused crytpo lending) could also IPO in S2 this year of regulatory considerations (or the absence of it) • On a non-financing related topic, but also crucial for the industry • The development of the crypto space is reminiscent of the early days overall, unfolding of legal cases on Ripple and Tether will also be of Internet. A lot of failures are to be expected, a lot of closely watched, as they may have important repercussions consolidations as well. Sources: The Block, Crunchbase, Messari, FT, CH research • In the end, who will be the Google of crypto?.

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