Mogo to acquire 19.99% of Coinsquare; agreement includes rights to increase ownership up to 40%
Mogo, a digital payments and financial technology company, announced its investment in Coinsquare Ltd. (“Coinsquare”), Canada’s leading digital asset trading platform, including the execution of a definitive agreement (the “Agreement”) for Mogo to acquire 19.99% ownership of Coinsquare’s outstanding common shares on a post-transaction basis for total consideration of approximately $56.4 million. The Agreement also includes rights for Mogo to acquire an additional 20% ownership interest in Coinsquare through purchases of shares from current shareholders and the exercise of warrants under certain conditions (refer to “Terms of the Transaction”), for consideration based on a pre-money valuation of Coinsquare ranging from $250-350 million. This strategic investment builds on a multi-year relationship between the two companies. Coinsquare acts as the trading platform for MogoCrypto, a service Mogo launched in 2018 to allow its members an easy and convenient way to buy and sell bitcoin.
Launched in 2014, Coinsquare has grown to become the leading digital asset trading platform in Canada, with trading volume in excess of $525 million in January 2021. Coinsquare provides digital asset traders with a proprietary trading platform engineered to deliver a robust, secure, and user-friendly interface for trading Bitcoin, Ethereum and other digital assets. The trading platform makes buying and selling digital assets quick and convenient, with customers able to easily manage their portfolio of digital assets. Coinsquare’s subsidiary, Coinsquare Capital Markets Ltd. (CCML) also recently submitted a dealer membership application to the Investment Industry Regulatory Organization of Canada (IIROC) and an application to the Ontario Securities Commission (OSC) to operate a marketplace for digital assets.
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Management Commentary:
“We believe strongly in the growing importance of cryptocurrency in the financial wallets of consumers, and deepening our relationship with Coinsquare will enable us to bring enhanced functionality and value into the MogoCrypto product,” said David Feller, CEO of Mogo. “We’ve had a relationship with Coinsquare for nearly three years and built strong familiarity with their team and platform, which we view as the most robust trading platform in Canada for digital assets.”
Greg Feller, President of Mogo, added: “This major strategic transaction with Coinsquare gives us a significant stake in a highly valuable platform in one of the most exciting and fastest growing sectors of fintech. We believe there are significant opportunities to drive value for both Mogo and Coinsquare by bringing together Mogo’s leading digital wallet capabilities and Coinsquare’s leading digital trading platform.”
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