The company in question, Cipher, had once competed with Coinbase-developed Toshi Ethereum browser. This acquisition is the first instance in which Coinbase has shelled cash to buy out a smaller rival company.
Cipher to Merge with Toshi
Coinbase, a company that made a profit of $1 billion from the cryptocurrency exchange business, already had its own Ethereum app browser, Toshi. Cipher shares a similar business model as both let users to store Ethereum-based digital tokens on their wallet and browse a storefront of decentralized apps running on the Ethereum blockchain.
Cipher founder Pete Kim will assume a new role as the head of engineering at Toshi and work closely with Toshi’s existing development team. Cipher and Kim will be merged under the Coinbase umbrella over time.
Existing Cipher features will also be merged into Toshi according to an announcement on Twitter, “Exciting news! Cipher Browser is joining Coinbase! Pete Kim will become head of engineering for Toshi and we’ll be merging many features of Cipher into Toshi.” Cipher also reiterated its commitment to building the best Web 3 experience on mobile.
A new feature coming soon to Toshi is support for testnets where developers can test a prototype version of their DApps before releasing it to the masses.
Coinbase’s New Acquisition Strategy
Coinbase recently hired Emilie Choi as its first-ever head of Mergers and Acquisitions and was immediately tasked with expanding the headcount at the company. One of the favored strategies in the startup world to hire talented and exceptional employees working at smaller, rival firms has been to buy out the target company and then integrate the staff.
Coinbase raised $100 million from investors in its last round of funding which when combined with its annual profit of over $1 billion, leaves no doubt that Emilie was inducted to lead an aggressive acquisition charge.
The Ambition: To be Crypto’s Google
Dan Romero, VP and General Manager of the six-year-old startup, had said, “I think our view is that this (cryptocurrency) is similar to the beginning of the internet. So we’re trying to build a Google-like company for the cryptocurrency space.”
Coinbase has lots to do in its quest to be a Google-esque technology giant. Although there are no plans for Coinbase to go public as of now, the chances are that the company may do it at some point in time.
Other Coinbase Acquisitions
In January 2018, Coinbase also acquired the developers that built Memo.Ai that built tools to manage technical teams. Similarly, Kippt and Blockr.io were both acquired in 2014. A notable distinction in all these buyouts is that the teams of acquired firms were all immediately absorbed into Coinbase.
Coinbase is also said to be close on the heels of Earn.com. The cryptocurrency platform allows users to earn bitcoin simply by completing tasks and replying to emails, similar to the MTurk platform. The deal, if agreed upon, would be more than $120 million worth of cash and stock options.