As the crypto industry suffers, decacorns can be yours at mere unicorn prices.
Shares in numerous private crypto startups are currently being offered at sizable discounts on Birel.io, a platform that specializes in such secondary market transactions, Birel's Richard Freemanson confirmed.
Those startups include Alchemy, Blockchain.com, Chainalysis, Kraken, ConsenSys, Blockdaemon, CoinDCX and OpenSea — collectively worth around $70 billion at the time of their most recent fundraises, all of which came in 2022.
The blocks of shares on offer range from just $3 million in size to $50 million, and the discounts vary widely. Most striking are Blockchain.com and ConsenSys, who have shares on offer at discounts of 74% and 71%, respectively, to their latest funding rounds. Chainalysis shares are up for sale at a 61% discount, OpenSea stock is available at a 51% discount and a CoinDCX block is listed at a 47% discount. The Alchemy, Blockdaemon and Kraken shares are discounted by 31%, 30% and 9%, respectively.
Spokespeople for Chainalysis, OpenSea and Blockdaemon declined to comment. The other companies mentioned did not immediately respond to requests for comment.
Not every crypto company listed on Birel.io is trading at a discount. Shares in the Bitcoin infrastructure firm Bitfury, for example, are listed at a small premium.
Shares changing hands on Birel.io should not be confused with so-called “down rounds” — when startups raise fresh capital at a lower valuation than they achieved previously. Secondary transactions instead involve existing shareholders selling their shares to new investors.
Nevertheless, they are an indication of investor appetite. Shares in startups in the AI sector, conversely, are generally trading at the price of those firms’ last fundraise or even at a premium, according to Freemanson.
“I cannot say that such discounts speak of commensurate negative results of companies. Discounts are associated with the absence of buyers at higher price levels,” he said of the crypto startup discounts. “Buyers are not active because the results of these companies partially depend on the price of the main cryptocurrency, the movement of which is now difficult to predict. And sellers do not always sell their entire volume, they exit partially for diversification.”
As shown by an email extract sent to a prominent venture capital firm in the U.S. and obtained by The Block, brokers have been proactively reaching out to investors in the crypto sector about the availability of discounted shares.
Ian Wittkopp, COO and head of investment at Sino Global Capital, confirmed that OTC brokers “have been quite active reaching out to funds to get a range of valuations for large equity fund positions.” Thomas Braziel, a partner at 507 Capital, said he’s “seeing shares of all kinds of things floating around.”
But Wittkopp added — in light of the numerous bankruptcies that have shaken up the crypto sector of late — that the discounts on offer are not necessarily an indictment of the startups prospects and could “say more about the seller than the position being sold.”
Braziel agrees. “I think it’s really about the current owners — you know, hedge funds — needing liquidity,” he said.
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