O'Leary-backed WonderFi set to acquire Coinberry
$38.5-million deal would create largest publicly traded end-to-end crypto platform
Vancouver-based decentralized finance platform WonderFi Technologies Inc. is set to acquire Toronto crypto trading platform Coinberry in a $38.5-million allshare transaction.
This comes as the company seeks to position itself as a market consolidator targeting Canadian licensed crypto platforms.
WonderFi said the deal would put about one-third of Canadian registered crypto trading platforms under its wing with more planned acquisitions to come.
It would also make the company the largest publicly traded end-toend crypto platform.
“WonderFi's management team continues to execute on accretive acquisitions and this is an extremely important one, because it shows the speed and vision behind WonderFi's plan,” said Kevin O'Leary, Shark Tank star and WonderFi's strategic investor.
“Compliant access to crypto is what matters and WonderFi has quickly established itself as a leader in Canada. Next stop, global.”
The deal comes only a few months after WonderFi snapped up regulated crypto marketplace Bitbuy for $206 million.
Ben Samaroo, co-founder and chief executive of WonderFi, told the Financial Post this acquisition establishes WonderFi as a Canadian consolidator that can tackle the world stage.
“It's really a springboard for us getting into larger jurisdictions as we get taken more seriously from U.S. and other larger markets, whereas I think it's quite difficult for somebody stand-alone ... to do that,” Samaroo said, adding that WonderFi can also draw from Coinberry's talent pool of 40 staff, including engineers.
When it comes to looking outward to other jurisdictions, Samaroo said that WonderFi's regulated crypto platforms and their more benevolent approach to working with regulators gives them a competitive advantage over those that have skirted regulations.
For now, Samaroo said WonderFi could be looking to the U.S. and Australia as other target markets outside of Canada.
Pursuing regulated crypto platforms is also a way to cut down on costs and time lags that come with going through the regulatory process.
When Bitbuy went through the regulatory process to registering as a securities dealer, it rang up $1.5 million in costs. Further compliance costs could easily run into the millions each year.
“There's definitely cost and time efficiencies as we bring licensed entities together,” Samaroo said.
“That $1.5-million price tag that would be sort of the cost to get from starting the process to actually getting the licence issued.
“The ongoing costs are actually very significant because there's all these requirements that you need on an ongoing basis.”
Through this acquisition, WonderFi is expected to gain 220,000 registered users and over $100 million of assets under custody as of the end of December, 2021.
The company also expects to be the country's largest crypto employer with 160 employees across its portfolio of companies.
It's really a springboard for us getting into larger jurisdictions as we get taken more seriously from U.S. and other larger markets.