One source told CNBC that FTX was expected to pay $25 million for BlockFi, while another said the deal would be closer to $50 million. Either way, it’s a massive drop from BlockFi’s last private valuation, which was $4.5 billion after its Series E in August, according to Crunchbase.
BlockFi CEO Zac Prince tweeted Thursday that “I can 100% confirm that we aren’t being sold for $25M.”
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BlockFi, which is based in Jersey City, New Jersey, raised around $1.3 billion in funding from investors including Valar Ventures and Akuna Capital, according to Crunchbase. So the current reports make it seem like the pending deal to FTX is more or less a fire sale.
This wouldn’t be FTX’s first time doing business with BlockFi. Around a week ago, FTX put up a $250 million emergency line of credit to BlockFi. BlockFi also recently laid off 20% of its 850-person workforce to try to control costs amid a market downturn.
Layoffs and plummeting valuations have rocked the tech industry in recent months, and crypto is no exception. Coinbase, for example, initiated layoffs, slowed hiring, and even rescinded accepted job offers because of the current market and a looming recession.
Private company valuations are also starting to catch up with public tech company ones. Instacart, for example, lowered its own valuation from around $39 billion to $24 billion to keep in line with the public markets.
Illustration: Dom Guzman
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Author: Sophia Kunthara