This is how Bitstamp announced the news on Twitter:
ANNOUNCING: Bitstamp was acquired by Belgium-based investment company NXMH. Our team, leadership and vision all remain the same. We believe this is the logical next step on our mission to be the most trusted digital currency exchange on the market: https://t.co/UxjNpDeKNR pic.twitter.com/3MUoQtdXFn
— Bitstamp (@Bitstamp) October 29, 2018
Although the exchange’s chief executive officer Nejc Kodrič did not provide any details about the terms of the deal (struck last December, but signed on 25 October 2018), he did say that this was “an all cash deal.” According to Fortune, “the purchase price was rumored to be around $400 million”.
The Brussels-based NXMH is an investment firm with more than 2 billion euros of assets under management. It is owned by South Korean conglomerate NXC, which invests in digital technologies, and also happens to own Korean crypto exchange Korbit. It is worth pointing out, however, that the two exchanges will continue to operate independently.
Kodrič told Reuters:
“The sale wasn’t planned. There was no active effort to go around and solicit buyers. The vibrant industry last year sparked potential interest from buyers to make a footprint in the industry. We started to get approached by buyers in the middle of last year.”
In a letter to customers over on the Bitstamp website, Kodrič explained the reason for the sale to NXMH:
“The reason why we finally decided to sell the company is a combination of the quality of the buyer, the quality of the offer and the fact that the industry is at a point where consolidation makes sense. A major factor in agreeing to the sale is that the mission, leadership and vision of the company remains the same.”
He also told customers there was no need to worry about the change in ownership of the company:
“I want to assure you that Bitstamp remains Bitstamp. We will continue to innovate with the goal of giving our customers the absolute best trading experience. It is business as usual here. We do anticipate that this acquisition will strengthen Bitstamp’s positioning for growth, which will provide opportunities to better serve our customers. Customers should not have any concerns about their accounts or changes to the way we operate.”
Kodrič retains 10% of Bitstamp’s shares and will continue to work as its CEO.Dan Morehead’s Pantera Capital Management, which had made a $10 million investment in Bitstamp company in 2014, “also sold part of its stake in Bitstamp to NXMH.” Morehead is the Chairman of Bitstamp’s Board of Directors.
Bitstamp was founded in August 2011 by Nejc Kodrič and Damijan Merlak (who “sold his entire 30 percent stake in Bitstamp with the deal and has not been active since 2015”), with the company initially “based out of a Slovenia garage with just a server, a couple of laptops, and a thousand euros in capital.” It currently has over three million users.
Kodrič told Reuters that falling crypto prices had affected business, with trading volume down between 60-70 percent, but pointed out that “Bitstamp remained profitable in 2018 because current cryptocurrency prices were still much higher than they were for most of last year.”
Kodrič and Merlak founded Bitstamp in August 2011. Kodrič says the company “started in a garage with two laptops and EUR 1000 seven years ago.”
Featured Image Courtesy of Bitstamp