Coinbase has acquired aspiring crypto prime broker, Tagomi, following months of speculation about the tie-up.
According to two sources, the deal — announced Wednesday — is valued somewhere between $70 million and $100 million. It represents one of Coinbase’s biggest acquisitions to date and will help fill out the exchange’s institutional business, which covers professional trading services and custody. CoinDesk reported Wednesday that the acquisition came in the form of an all-stock deal.
The Block first reported on talks between Coinbase and Tagomi in November. At the time, Tagomi was holding similar conversations with other exchanges, including Binance, according to a person familiar with the discussions.
The deal between Coinbase and Tagomi is pending regulatory approval. It is expected to close at the end of 2020, and once acquired, Tagomi joins the list of the more than one dozen firms Coinbase has bought.
Launched in 2018, Tagomi gate-crashed the cryptocurrency market as an aspiring prime broker. In the equities trading world, such intermediaries offer services that allow investors to seamlessly trade across market venues. To start, the firm pioneered best-execution in crypto, the ability to execute a trade at the best possible price available in the market.
The firm counts Pantera Capital, Digital Currency Group, and Peter Thiel’s Founders Fund among its investors. It has been led by co-CEOs Jennifer Campbell, a former analyst at Union Square Ventures, and Greg Tusar, a former partner at Goldman Sachs.
Since launch, Tagomi has continued to expand the number of exchanges and over-the-counter trading desks it routes orders to while adding new services such as the ability to short cryptocurrencies.
As for Coinbase, the acquisition comes at a time when the company is expanding its own institutional offering.