Is the ten-year-old store priced at $125 million, CoinDesk sold at a loss?

Author: Web3 Trends

On the tenth anniversary of its founding, and held by DCG Group for eight years, the encrypted media CoinDesk changed hands again.

A group of investors has acquired CoinDesk for nearly $125 million, The Wall Street Journal reported on July 20. The investment group is led by Matthew Roszak of Tally Capital, a Web3-focused private investment firm, and Peter Vessence of venture capital firm and family-run Capital 6, the people said.

In January 2016, CoinDesk was acquired by DCG Group for $500,000 to $600,000. Since the acquisition, CoinDesk has repeatedly faced doubts about DCG’s manipulation of its news independence, and there have also been incidents of staff resignation caused by the merger of the office into the DCG headquarters. But it is undeniable that, as a ten-year-old veteran encryption media, CoinDesk is still one of the most popular media in the encryption industry.

Especially at the beginning of the FTX thunder crisis last year, CoinDesk was the first to disclose the balance sheet problem of Alameda Research, thus revealing the true face of FTX’s chaotic Lushan. This has undoubtedly contributed to bursting the bubble crisis that has lasted for many years in the encryption industry, and also defended its media reputation to a certain extent.

However, affected by the FTX thunder crisis, CoinDesk parent company DCG is also deeply in debt crisis. At the beginning of the year, Gemini co-founder Cameron Winklevoss directly fired at DCG CEO Barry Silbert, accusing DCG and its subsidiary Genesis of maliciously defaulting on $900 million to Gemini customers. Therefore, “Whether Genesis will become the first encryption mine in 2023” has become a hot topic in the market.

Even though the war of words between DCG and Gemini has elements of entertainment and gossip, the debt crisis exposed in it should not be underestimated. As one of the subsidiaries of DCG, CoinDesk was also burned by the fire while daring to fire at the industry leader FTX.

On January 19, CoinDesk CEO Kevin Worth publicly stated that he was seeking to sell some or all of the business to raise funds for development. According to its introduction, CoinDesk has received a large number of acquisition intentions. Afterwards, encryption KOLs such as Wang Feng, the founder of Mars Finance, and Charles Hoskinson, the joint founder of Cardano, all publicly expressed their intention to acquire. CZ, the head of Binance, was also rumored to use his CoinMarketCap to acquire it, but he quickly denied it.

“This may be a good business, but it is not suitable for our business coverage.” CZ explained. This is understandable given that Binance has faced profitability issues for years following its acquisition of CoinMarketCap.

“CoinDesk has bloated staff, shrinking revenue, and no meaningful research/institutional product.” Crypto KOL @AP_Abacus revealed in May that the latest verbal bid was $30 million after defrosting the bidding bubble for CoinDesk.

And just at the end of last year, the proposed acquisition price of US$300 million was considered seriously underestimated. That’s because CoinDesk rakes in $50 million a year through online advertising and its annual benchmark event, the Consensus Conference.

But during the crypto bear market, the longer it drags on, the lower the price. Compared with previous years, this year’s Consensus Conference has shown a deserted state, and the number of participants and sponsors have all declined. At the beginning of this year, Cardano joint creation Charles said that the quotation of 200 million US dollars was a bit high, and the transaction was more difficult.

After the dust settled, the market priced CoinDesk at $125 million. If it weren’t for the bear market downturn, CoinDesk might be able to sell at a better price. A reasonable explanation is that after several negotiations and considerations, especially with a serious debt crisis, DCG had to reluctantly give up.

In fact, it wasn’t just CoinDesk who sold off to survive. During the crypto bear market, faced with a general crisis of survival in the industry, how can encrypted media be an exception. In February of this year, another encrypted media, The Block, also laid off 27 people, nearly half of whom were editors and researchers.

It is unclear where the investment group that bought CoinDesk will take its business. If the revenue problems generally faced by encrypted media cannot be resolved, perhaps it will change hands again. However, when Bitcoin was born 14 years ago, it is not easy for encrypted media with a history of ten years. The industry needs independent and rational media to jointly build.