A syndicate of investors led by Matthew Roszak of Tally Capital and Peter Vessenes of Capital6 is in the final stages of buying crypto-focused media company CoinDesk, Wall Street Journal (WSJ) reports, citing people familiar with the matter. The reported value of the transaction is $125 million and the deal is expected to be finalized in the next few weeks.
CoinDesk is owned by Digital Currency Group (DCG), a multi-billion dollar crypto-focused conglomerate founded by Barry Silbert. The group also owns Genesis Global Capital (Genesis) crypto trading and lending platform and Grayscale Investments digital asset fund.
DCG acquired CoinDesk in 2016 for $500,000. Back in January, the WSJ reported that DCG had hired Lazard financial advisors to broker a potential sale of CoinDesk. At that time the valuation of the company was rumored at $200 million.
CoinDesk is a leading blockchain and crypto-focused media company with around 7.4 million monthly visitors to its website, according to SimilarWeb. The activity across all crypto-focused websites is currently lower compared to its peak in 2021 when CoinDesk saw twice as many visitors.
In any case, if confirmed, the transaction will set a benchmark of around $16 per monthly visitor. If anything this may be considered on the lower end of the scale when compared to the cost of the customer acquisition for related industries.
It may be difficult to define the transaction as "arm's length" because it comes as DCG is being squeezed by the bankruptcy of its lending arm, Genesis, and the recent closure of its institutional trading platform, Trade-Block. These companies suffered due to a series of collapses and bankruptcies in the crypto industry last year.
It could also be speculated that CoinDesk's valuation was negatively affected by the drop in advertising revenues across the crypto industry. According to PitchBook data, there has been a stark decline from the $12.14 billion peak the industry hit in the first quarter of 2022 to $2.3 billion in the same period of 2023.
The deal also reportedly covers only part of CoinDesk's business. According to the WSJ, Digital Currency Group is expected to retain a stake in the media, events, data and indices parts of the business as part of the deal.
The new owners of the media outlet already have investments in the crypto industry. Tally Capital, a private investment firm focused on crypto and blockchain-based technologies, is an investor in Qtum, Blockstream, Enter and Factom, as well as in BitcoinMagazine's holding company BTC Media. Capital6, a venture-capital firm, has investments in Lamina1, Noteworthy, Fan Controlled Football and Strix Leviathan. It will be interesting to Observe how the acquisition will affect these companies.
