Crypto M&A Trend in the Blockchain Industry
Crypto M&A deals & trends in the blockchain industry are either strategic & financial M&A. TNC Crypto M&A is a new viable option.
TNC Group has been persistently working toward our laid out Crypto M&A goal. Due to this, we always have brought up the term “Crypto M&A” in almost all our publicity efforts. Nonetheless, as we clarified on our previous blog, TNC has created a singular definition of what is Crypto M&A in our program — wherein the merge will only be performed through a token swap.
In reviewing the M&A trend, a significant number of crypto- and blockchain-related M&A deals were recorded ever since 2013. Based on a research, we have learned the most common M&A deal types that occurred within the market. TNC has observed the market and we presented a unique and favorable M&A proposal for existing blockchain companies to drive. Thus, TNC is laying down Crypto M&A benefits instilled within our unconventionally structured Crypto M&A program.
Key Takeaways
• Crypto M&A in 2019 dropped to 60% since its peak year
• Tokendata has divided and classified M&A into two: Strategic M&A and Financial M&A
• TNC Crypto M&A is not the same with conventional M&A in the crypto space
• TNC Crypto M&A is a hybrid of Strategic and Financial M&A
Crypto M&A Annual Deal Market
Mergers and Acquisitions (M&A) has been a long-standing strategy in the business landscape. M&As are usually devised to foster company progress by efficient mitigation of losses and utilization of company resources. In business economics, M&A can serve as a viable solution for companies facing adverse financial situations.
As for M&A in the crypto space, the number of deal activity started to grow since 2013 and drastically peaked during 2018. As an estimate, there are approximately 350 crypto M&A deals that were recorded, reaching a total value of $4 billion. The average deal value is $10 million with Acqui-hire as the common deal type.
Quick Facts about Crypto M&A
• Total number of deals: 350 deals
• Total Deal Value: $4 billion
• Average Deal Value: $10 million
• Most Active Year: 2018
• Most Active Acquirer: Coinbase
• Most Common Deal Type: Acquihire
• Largest Transaction: Circle-Poloniex
According to a report published in CNBC, the M&A activity surges when the Bitcoin price slumps. Monthly activity peaked in early 2018 as prices and industry attention soared. This fact was also observed by Tokendata, concluding that M&A activities are volatile and seem positively correlated to crypto prices and industry sentiment.
Despite the positive surge in number within these three years, there has been a sharp decline in M&A deals in the crypto mining sector since early 2019. According to Pitchbook and The Block, agreements and value spend since 2018 dropped to almost 60%. A conclusion formed as the investment interest appears to focus on distributed ledger technology (DLT) infrastructure.
Strategic M&A vs. Financial M&A
Based on the comprehensive Crypto M&A study conducted by Tokendata, we can comprehend that M&A activity has been very volatile and observed to be closely correlated to the cryptocurrency market price and sentiment. Other than that, Tokendata closely scrutinizes the most common purpose and deal types. Tokendata has divided and classified the M&A types into two: Strategic M&A and Financial M&A.
Strategic M&A pertains to acquisitions with the purpose of consolidation, human resource, technology, and vertical integration. The standard deal types for Strategic M&A are the following:
• Acqui-hire
• Technology Tuck-in
• Diversification
• Vertical and Horizontal Mergers
Moreover, the typical business buyers for these deals are exchanges and infrastructure projects.
On the contrary, Financial M&A mainly focuses on investment returns and financial gains. The deal types under this classification are as follows:
• Leveraged Buy-Out
• Reverse Merger
• Portfolio Investment
Meanwhile, the usual sectors engaging in financial M&A are investment funds and private equity.
Mergers and Acquisitions (M&A) in the Blockchain Industry
Interestingly, Strategic M&As have dominated the M&A scene. The disparity between strategic and financial M&As became evident in 2019. A notable strategic M&A is Facebook acqui-hiring Chainspace, a blockchain startup, and Kraken, a cryptocurrency exchange acquiring Crypto Facilities for $100 million.
Another key player involved in the strategic M&A race is Coinbase. Coinbase has been aggressive in hunting talents and acquiring technology resources. This 2019, Coinbase bought the $8 billion-valued crypto business Blockspring. It is a San Francisco-based startup that enables developers to collect and process data from application program interfaces (API).
Meanwhile, one of the biggest M&A deals was the acquisition of the cryptocurrency exchange Poloniex by Circle, a company backed by Goldman Sachs. Worth $400 million, this venture is an effort done to tap into the emerging fintech industry. This is a strategic M&A done to easily enter the cryptocurrency market.
TNC Crypto M&A: An Unconventional M&A
After learning about the Crypto M&A trends and types, TNC Crypto M&A turns out to be an innovative type that taps certain similar advantages from strategic and financial M&A. It is a unique M&A proposition that is not similar to the M&A deal types we have mentioned above.
“Unlike conventional M&A, TNC Crypto M&A will not acquire any company, team, or company identity. Instead, we would be merging cryptocurrencies.”
Through a token swap, we aim to extend fund support to existing companies and build a network of blockchain developers.
Strategically, we would establish a partnership with the companies that joined our Crypto M&A program. By being part of the TNC network, merger companies are priority clients to avail vast blockchain business services from TNC IT Group. We would support merger companies to progress.
Furthermore, the Crypto M&A program also paves a way for investment opportunities. TNC is in the lookout for promising projects and technology to invest on and interested merger companies are very much welcome to apply. Depending on negotiations, TNC will not acquire the project but will offer investment opportunities for innovative blockchain technologies and start-up businesses. This is all in line with TNC’s goal of proliferating blockchain technology worldwide.
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