Coinbase Acquires Data Collection Startup Blockspring
Coinbase, one of the most recognized companies in the cryptocurrency sector with an $8 billion dollar valuation, has acquired Blockspring, a startup focused on data collection and processing (Jan. 14, 2019).
Blockspring in Brief
Interestingly in this instance, Blockspring announced the acquisition on their own blog, which is unlike many other high-profile acquisitions in the cryptocurrency sector and furthermore, Coinbase did not try to publicize the announcement in any way.
Blockspring was forced to pivot early on, considering that it originally planned on focusing on serverless solutions before Amazon launched their own product called Lambda in the same niche in November 2014 as part of their Amazon Web Services (AWS), which came months after Blockspring was founded.
More specifically, Blockspring’s model was centered on communication without servers. Obviously, given the overshadowing name recognition of Amazon, Blockspring was forced to reconsider its business model after the Lambda launch.
The company then focused on marketing and recruitment, utilized a subscription model, and claimed to work with “thousands” of companies at the time of its acquisition.
The fact that Coinbase acquired the company is interesting considering that two of the firms who invested in Blockspring, SV Angel and A16z, also invested in Coinbase. It is likely that these common investors have been instrumental in the deal going forward. Blockspring also graduated the globally-known startup accelerator Y Combinator, who they openly thank in the announcement writing:
“We want to especially thank the incredible team at Y Combinator who’ve been there for us through thick and thin.”
Blockspring made it clear on its blog that it will continue to operate as an independent company, and called joining Coinbase a “no brainer”.
It pointed out that the exchange is instrumental in establishing an “open financial system”, and humbly acknowledge that they can now “make something greater than we could on our own.”
The company also pointed out that there would be no disruption in their products for their current and new customers. Blockspring also referenced the strength of Coinbase’s engineering team, pointing out that they had hired Tim Wagner, who had previously worked on AWS Lambda.
Tim Wagner even tweeted about the fact that Blockspring had joined Coinbase on Twitter, saying that he was “excited for them to continue their work here at Coinbase”:
First 2019 Coinbase Acquisition
This does mark the first major acquisition from Coinbase in 2019, and many believe that the move was made strictly to acquire talent, rather than tap into Blockspring’s customer base.
Having made a significant number of acquisitions last year Coinbase grew dramatically in its user base. Notably, the CEO of Coinbase, Brian Armstrong, claimed in an interview with Bloomberg, (Aug. 14, 2018) that the cryptocurrency exchange was signing up 50,000 new users per day.
The most notable acquisition Coinbase made last year was securities broker Keystone Capital, which many believed was a power-play to eventually become a fully regulated broker-dealer under the Securities Exchange Commission (SEC). Coinbase also launched its own crypto-startup incubator as well, entitled Coinbase Ventures in April of last year, stating that “our goal is simply to help the most compelling companies in the space to flourish.”