So finally it has happened. Binance has joined the big boys club by completing its first ever acquisition deal in which it snapped up mobile wallet company Trust Wallet. All along we kept wondering why this crypto market giant is not acquiring any other startup, and now finally it has happened in a hushed-up affair!
The terms of deal are undisclosed, but Binance confirmed to global tech news publication TechCrunch that the deal has been closed with a mix of cash, Binance stock and a portion of its BNB tokens. The company also revealed to TechCrunch that although Binance may help Trust Wallet with certain administration and marketing stuff, the company will continue to operate as an independent entity.
Speaking about the acquisition Binance CEO Changpeng Zhao (CZ) told TechCrunch:
“The Trust Wallet team shares the same values as us and the products are very complementary. For users who like to withdraw funds into a wallet now we have a product they can use. We plan to keep the app as independent as possible. There will be more features going into it but not so much from a Binance demand perspective. We are like the addition of a godfather for the baby… there’ll be some cooperation.”
Trust Wallet may not be as well known as some other wallets in the industry, but according to CZ it’s “a diamond in the dirt” with “strong technical skills”. CZ said about the company:
“They haven’t done much marketing which is where we can help. They are strong technically but don’t like doing marketing, HR etc… now merging with us they don’t have to worry about money.”
Trust Wallet CEO and Founder Viktor Radchenko also echoed the words of CZ. He said that he is a “product person” and he doesn’t like thinking about investors and money people, which is why this decision was taken.
“I’m a product person and developer. I spend my time thinking about solving problems for the end-user. I never liked dealing with investors and money people, it is so much hassle. Having resources will help us grow quicker and so I can focus on adoption for the users that don’t even have wallets.”
CZ also said that Trust Wallet will also be one of those default wallets that will be supported by the decentralized exchange that Binance is building. Therefore, it’s unarguably the first strategic acquisition for Malta headquartered company.
Binance is world’s largest cryptocurrency exchange by 24-hr trading volume, and it’s sitting on a huge pile of cash. However, till now it had not used that cash to acquire another company. As a result, market observers were also wondering why Binance is not making any acquisitions despite being in a strong financial position. Now when company has dipped its toes into the waters of acquisition game, it will be interesting to see which other companies are acquired next by it.