WonderFi to Acquire Coinberry; Largest Web3 Community in Canada

In its efforts to continue consolidating licensed crypto trading platforms, DeFi platform WonderFi announced Friday its latest consolidation through an accretive acquisition of one of Canada’s leading crypto-asset trading platforms and the first pure-play licensed crypto broker. 

Following its March 24 acquisition of BitBuy, Canada’s first licensed crypto marketplace, WonderFi Technologies announced today that it is in the process of acquiring Coinberry Limited, opening the doors to over 750,000 users throughout Canada.  

Backed by Shark Tank’s Kevin O’Leary, WonderFi is an end-to-end consumer platform for those seeking exposure to cryptocurrency and the emerging DeFi ecosystem. It has helped serve as a bridge to the next generation of finance, breaking down the barriers that exist in traditional finance – and helping to make crypto and DeFi accessible to the masses.

Launched in 2017, Coinberry has become one of Canada’s leading crypto trading platforms with over $1 billion transacted to date. The platform currently features 29 of the top crypto trading pairs and services, over 220,000 users, with over $13 million in revenue for the twelve months ending on December 31. 

Accretive acquisition

Under the terms of the accretive acquisition, the deal is valued at $38.6 million. 

An “accretive acquisition” is a scenario that increases the earnings per share of the acquirer which is accomplished traditionally by offering a lower price for the acquiree than the earnings that the acquiree will contribute to the combined entity. 

“We have a shared belief with WonderFi that seamless integration and unified access to digital assets is the future and where we want to be positioned,” said Coinberry CEO and founder Andrei Poliakov. “We chose this route for Coinberry because we felt it was the best thing for our loyal Canadian users and this merger will give users access to the best prices, the best products, and the best service.”

Ben Samaroo, WonderFi’s CEO, also weighed in, stating that this recent acquisition “establishes a great framework for [WonderFi’s] expansion into global markets in 2022. As we continue our consolidation of leading licensed crypto platforms, our user count, revenue, and pool of talent continue to grow.”

Canada’s attractiveness; BitBuy acquisition

Last month, WonderFi concluded its purchase of BitBuy’s parent company First Ledger Corp for $162 million, giving it complete ownership and control of Canada’s crypto marketplace. The deal gave WonderFi access to over 375,000 users from the Toronto-based company. 

Since 2016, BitBuy has experienced over $4.4 billion in transactions, with the company generating over $31 million in revenue last year, according to WonderFi. 

But what makes Canada so attractive for both the DeFi and crypto communities?

WonderFi CEO and founder Ben Samaroo and BitBuy CEO Michael Arbus sat down over Zoom in an exclusive interview with Be[In]Crypto, shedding light on the significance BitBuy’s integration brings to the WonderFi and DeFi communities. 

Canada a good alternative

“Canada, historically, was known for being a market that would help facilitate higher-risk investment products,” Arbus told Be[In]Crypto. “So, while the U.S. and other markets are quite large, Canada had a very developed brokered system, finance system, public market system, smaller junior exchanges that were well known by Canadians, and an active level of market participants that were prepared to finance those things.”

For crypto entrepreneurs who don’t have the track record to go into venture capital, which requires substance and some level of credibility, Canada, according to Arbus, serves as an alternative to find other sources of capital.

Shifting gears to the community, Samaroo and Arbus each laid out how their platforms have embraced building and managing their respective communities as they have continued their mission of consolidating platforms. 

“I think what we are doing with WonderFi is not only going after people that want to trade crypto but also trying to create better access to digital assets for people that don’t have the experience or really, interest, at this point,” Samaroo told Be[In]Crypto. 

“We’re trying to create new ramps for people through gaming and NFTs, where people aren’t necessarily interested in trading, but it’s this avenue for them to get exposure to learn about digital assets and the gateway drug to get into this space.”

WonderFi on educational drive

Samaroo emphasized that WonderFi’s strategic moves in the space right now are all part of its educational drive to help remove that barrier that exists that makes people feel “dumb or ignorant.”

“One of the biggest challenges we hear from people is that the level of conversation is too high for them; they feel dumb. The educational part is a big aspect of our community,” he noted.

Adding to Samaroo’s point, Arbus mentioned what he calls the “big envelope of investment.”

“In addition to education, you’ve got multiple types of users within Web3… the investor and speculator that wants to do some trading, the person who wants to store some value (an investment product), a person who wants to earn some return (an investment product),” Arbus explained. 

“So, you’ve got that big envelope of investment, and our mantra was that we’re the destination of the crypto investor; that is generation one of the early adopters… so, if we can offer all of it through one hub, that’s our big vision, in that it doesn’t matter where that person comes through into the community. Once they’re part of our community, and they start to age and their earnings start to grow, they begin to care less about why they initially joined the WonderFi community, and begin caring about other aspects, such as yield and return.” 

Canada’s Web3 Council

WonderFi’s acquisition of and integration with Coinberry will establish WonderFi as Canada’s largest publicly traded end-to-end consumer platform for people seeking access to CeFi and DeFi. 

Last month, WonderFi revealed it joined the Canadian Web3 Council as a founding member, alongside Dapper Labs and Wealthsimple. The Council is a non-profit trade association that strives to position Canada as a leader in Web3 technology such as blockchain and crypto, advocating for a national Web3 strategy to support a more transparent and inclusive digital economy.

“The Council is important because Canada continues to have the opportunity to be a leader with digital assets,” Samaroo told Be[In]Crypto.

“I think regulators are very progressive here [referencing Canada], although they move slowly just as any regulator does. With everything that’s happening in Web3 and DeFi, there’s a lot of places struggling to figure out how to deal with the technology when it’s not fully centralized. I think this coalition that has come together gets the most involved people in the room to be part of the conversation and help position Canada as a hub for Web3.”

Expect a Q2 2022 closing

Already approved by the boards of directors of both WonderFi and Coinberry, the acquisition is expected to close in Q2 2022, subject to approval by WonderFi and Coinberry shareholders. 

Cassels, Brock and Blackwell are acting as legal advisor to WonderFi on this transaction and Haywood Securities provided a fairness opinion to the board of directors of WonderFi. DLA Piper is acting as legal advisor to Coinberry on the transaction and Research Capital provides a fairness opinion to the board of directors of Coinberry. 

Last Aug, Be[in]Crypto spoke with O’Leary as WonderFi had made its public debut about what today’s generation should be doing right now with DeFi. 

“I told my son that this was an opportunity to democratize investing, making it less expensive and totally transparent so that people can use crypto and get interest off their holdings and income,” he told me. “Just get yourself exposed to it; you don’t have to go all-in, but just educate yourself, because the barrier to entry is very, very low.”

Referencing WonderFi, he suggested that users just “try it and learn from it, because that’s the whole idea. This is a massive educational process that we are going to go through here, where people will realize they can actually use this to have an investment strategy where they can make some income, which is all I wanted in the first place.”

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