Since September, three companies in Africa’s crypto ecosystem have been acquired.
As the global crypto industry has grown, so too has the number of mergers and acquisitions (M&A) in the space. According to Blockworks, there were 59 crypto M&A deals in 2020, followed by 180 in 2021 and 92 in the first half of 2022.
In the African context, crypto M&A hasn’t been a major topic of discussion. However, a sudden flurry of acquisitions over the past month suggests things may be changing.
The first acquisition to take place in September was that of NaijaCrypto exchange by PowerDfi. Originating from the state of Wyoming, PowerDfi is a platform where tokenised assets can be leveraged for staking, loans and derivative creation.
According to the acquisition press release that came out on 12 September, the combination of the Nigerian exchange with PowerDfi will allow the new entity to build a blockchain-based derivatives platform that lets businesses hedge against native currency and asset exposure risk.
On 15 September, a mere three days after the NaijaCrypto announcement, South Africa’s Virtual Nation Builders (VNB) announced that it had acquired FHM, the creator of the Safcoin cryptocurrency.
VNB made news in March when it helped to broker the sale of Nelson Mandela’s arrest warrant in NFT form for $130K. The tie-up between VNB and FHM will see Safcoin “list and merge all its digital use-cases and platforms into the new VNB-built Cowrie exchange.”
Finally on 6 October, Nigeria’s Helicarrier, the parent company of Buycoins exchange, announced that it had acquired Accrue. Accrue is an app that allows its users to save in stablecoins and auto-invest in stocks and crypto.
The move will see Buycoins Basic move over to Accrue, while Buycoins Pro, which is aimed at advanced crypto traders, remains under the Buycoins brand. The acquisition announcement also highlighted how Helicarrier’s founders were early investors in Accrue, which was founded by ex-Helicarrier employees.
What explains this sudden increase in crypto M&A action in Africa? Without access to more details around each acquisition, it’s difficult to say exactly. Earlier this month, Binance exchange’s CEO revealed his plans to spend up to $1 billion on acquisitions and investments in 2022. According to CZ, the bear market is the key driver of market consolidation.
It’s noteworthy that the three acquisitions under discussion all involved an exchange. In the case of PowerDfi and Naijacrypto, it was an exchange being acquired. In the other two cases where VNB and Helicarrier were the buyers, it was companies that have exchanges as part of their business doing the acquiring.
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