The deal terms include 70 million new shares of WonderFi and C$20 million ($15.7 million) in upfront cash. It also includes C$30 million ($23.6 million) in deferred cash through a vendor-takeback note due in 12 months. The deal is expected to close in the first quarter, with Bitbuy’s president and CFO, Dean Skurka, set to join WonderFi’s board. WonderFi first announced a strategic investment in Bitbuy’s parent company in December for an undisclosed amount.
Vancouver-based WonderFi closed a financing round in June that included strategic investors Kevin O’Leary, Leonard Latchman, Argo Blockchain, BIGG Digital, Josh Richards and Animal Capital. The company rebranded to WonderFi from Defi Ventures in a nod to O’Leary’s nickname as “Mr. Wonderful” from television shows “Shark Tank” and “Dragon’s Den.” WonderFi also credits the billionaire founder of crypto exchange FTX, Sam Bankman-Fried, as a strategic investor, according to its latest presentation.
“This is a combination of two management teams with excellent executional skills that now have the bandwidth, assets and licenses to provide an institutional-grade compliant crypto platform to investors interested in exposure to centralized and decentralized financial services,” O’Leary said in the statement.
O’Leary has been an advocate for crypto in recent months and said in a 2022 outlook that his largest position is in ether, the token of the Ethereum blockchain. He also said he owns Polygon (MATIC) and Solana, in addition to bitcoin.
WonderFi is publicly listed on Canada’s NEO Exchange under stock ticker WNDR. Its latest market capitalization stood at C$168.3 million ($132 million), with a stock price of C$2.25 ($1.7). The company has cash and crypto holdings totaling C$49.7 million ($39 million), according to its 2021 year-end results.
Bobby Halpern, principal of Toronto-based Halpern & Co., acquired Bitbuy toward the beginning of 2018, when the exchange had about 500 customers and bitcoin prices were crashing. The company now has over 375,000 Canadian customers and generated over C$31 million ($24 million) in revenue during the 12-month period ending Sept. 30, according to the statement.
Bitbuy said in December it was Canada’s first crypto trading platform to become regulated as a marketplace, in addition to being registered as a restricted dealer in Canada.
Investment bank Haywood Securities gave a fairness opinion to WonderFi’s board on the deal, while Canaccord Genuity is the financial adviser to Bitbuy.
UPDATE (Jan. 4, 13:00 UTC): Changes photo to one of the Bitbuy team.