One of Australia’s most colourful business identities, online retailer Ruslan Kogan, has found himself an unexpected investor in a major Canadian cryptocurrency outfit.
Kogan.com, the publicly-listed online retailer in which Mr Kogan is the largest investor, became a shareholder in the owner of Canadian trading platform Bitbuy in December after agreeing to sell it the rights to Bitbuy.com.
Kogan.com had owned the domain since 2013, one of an enormous number the company had acquired. As part of the deal Kogan.com and Bitbuy agreed to enter into an advertising arrangement, with Kogan to support the crypto exchange’s planned entry into the Australian market.
For its part Kogan.com was handed $US1.5m ($2.1m) and $C2.8m ($3m) “in either equity in First Ledger or cash upon exercise of the warrant which will occur within one year after the transfer of the domain”.
On Wednesday, however, the company found itself an investor in an even larger cryptocurrency operation after Canadian firm, WonderFi Technologies, agreed to buy BitBuy’s owner – First Ledger Corp – for around $226m.
Corporate documents for the privately held business, lodged with the Canadian regulator, show an indicative price of $C2.40 per share in First Ledger.
In July 2021 First Ledger issued 4.5 million shares to investors.
The disclosure of the deal comes just weeks after WonderFi, backed by businessman Kevin O’Leary, made a strategic investment in First Ledger.
“This is a combination of two management teams with excellent executional skills that now have the bandwidth, assets and licences to provide an institutional grade compliant crypto platform to investors interested in exposure to centralised and decentralised financial services,” said Mr O’Leary in a statement.
WonderFi will gain access to Bitbuy’s 375,000 clients who have transacted more than $4.4bn in the platform. The acquisition will be paid for by issuing First Ledger Corp investors shares, and just over $55m in cash.
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WonderFi – previously called Defi Ventures but rebranded to reflect Mr O’Leary’s nickname on the Canadian television program Shark Tank, is listed on the NEO Exchange and has a market value of around $180m. In November, Bitbuy became Canada’s first approved crypto marketplace, and has recorded 3379 per cent revenue growth from 2017 to 2020
“The alignment with WonderFi’s talented team, along with numerous operational synergies, represents opportunities for future growth we can collectively share with our clients, staff and shareholders,” said Dean Skurka, president of Bitbuy
Two thirds of shareholders in WonderFi and First Ledger have approved the sale which is expected to close in the first quarter.
The Canadian company also looks set to continue First Ledger’s planned push into Australian markets under the terms of its deal with Kogan.com. The ASX-listed retailer – thanks to its holding in First Ledger – will reap the cash and shares benefits, leaving shareholders a holding in the Canadian crypto platform.
The Australian has confirmed Kogan.com did not exercise its warrant to convert its shares to cash prior to the deal lobbed by WonderFi.
Kogan did acknowledge added upsides on dollar values of the deal it signed in December.
The acquisition of First Ledger comes not long after it bought Bitbuy in 2018, when the trading platform had just 500 customers.
In December WonderFi lobbed a deal to buy Bulgarian company Mena Software, operating under the name Crypto APIs, which offers data solutions to buyers of cryptocurrencies.
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