Coinbase has made its first real acquisition.
In a deal that shows how the cryptocurrency platform continues to mature and expand, Coinbase is buying Earn.com, a portal that allows people to make money by answering emails or completing other tasks.
Coinbase’s offer was slightly more than $100 million, according to people familiar with the deal, though with some juicy earn-outs for Earn leadership. Earn encountered some pushback from its investors at that sale price because that’s a sharp decrease from its last round of private financing in 2015 — $310 million before the new cash, according to PitchBook — though later investors will as usual be paid out first.
Coinbase is paying for the company with some cash, some stock, and interestingly, some crypto assets.
A huge part of the deal’s appeal to Coinbase is the chance to bring Balaji Srinivasan, a well-regarded former Andreessen Horowitz partner, into their headquarters. Srinivasan will become Coinbase’s CTO as the company continues to aggressively fill out its C-suite in the early part of this year.
One of those big hires was Emilie Choi, who joined Coinbase this March to do stuff like this: Make acquisitions. The company has only done small “acqhire” deals in the past — and again, hiring Srinivasan is said by sources to be much of the logic on this one, too — but the scale of this acquisition is another growing-up moment for Coinbase.
Founded in 2013 as a hardware maker for bitcoin mining, Earn.com was originally known as 21.co before rebranding itself as a social network in the fall of 2017. Now the company is a product that is meant to assign a price to emailing someone blindly; users pay the recipient (usually someone prominent) if the recipient replies to their note.
Earn.com stands out as a very real use case of cryptocurrency, however, in an age where lots of projects remain theoretical.
Previous backers of Earn include Tyler and Cameron Winklevoss, RRE Ventures and Srinivasan’s Andreessen Horowitz.