VersiFi, a crypto trading and lending firm co-led by a former Genesis executive, has acquired Ather Digital, a crypto trading technology startup, for an undisclosed sum.

The deal will help VersiFi add direct market access, algorithmic trading and smart order routing to its platform, the firm said Thursday. The deal terms were undisclosed, but VersiFi founder and co-CEO Sameer Shalaby told The Block that it was an "all-stock" deal in which all Ather Digital shareholders received shares in VersiFi.

One of those shareholders is Manifold Capital Partners, a quantitative investment firm from which Ather Digital was spun out in 2022. Manifold and other high-frequency trading hedge funds developed Ather's technology to meet their crypto trading requirements. Manifold and other Ather investors have now become "minority" shareholders in VersiFi.

The deal comes around six months after VersiFi raised $10 million in Series A funding last November to launch its crypto trading and lending business. At the time, it also hired Martin Garcia, former Genesis managing director and co-head of trading and lending, as co-CEO.

In December, VersiFi met Ather Digital, Shalaby said. Then in January, acquisition talks began, and the deal closed this month, he added.

Supporting institutional investors

As to why VersiFi acquired Ather Digital, Shalaby said the overall market activities and investors' focus have "significantly increased" in the crypto space over the past six months, fueled by recent spot Bitcoin ETF approvals in the U.S. and other jurisdictions formally embracing or regulating the space.

"To that end, VersiFi has accelerated its plan to support institutional investors with more complete trading capabilities from bi-lateral to high-frequency trading," Shalaby said. "Additionally, direct market access (DMA) clients have been eager to increase their leverage and borrowing, which creates natural synergies between Ather's DMA and VersiFi," he added.

DMA allows investors to place orders directly on exchange order books, bypassing brokers. This direct connection enables faster trade execution, benefiting high-frequency and algorithmic trading strategies that require speed and precision.

Offshore expansion plans

As part of the deal, the U.S.-based VersiFi will leverage Ather's Abu Dhabi office and team to build out its international presence in the jurisdiction, Shalaby said. "Our focus is offshore markets once we are fully regulated in the UAE, which we expect to happen over the next quarter," he added.

Ather's team has about a dozen people who have all joined the VersiFi team, Shalaby said. Its founder and chief technology officer, Sidharth Sankhe, has taken the role of head of quant trading technologies at VersiFi. As for VersiFi, it has a headcount of about 25 people and plans to expand the team in Abu Dhabi across trading and operations, Shalaby added.

VersiFi currently isn't looking to raise additional capital, Shalaby said. He declined to comment on how much Ather has raised to date. "Ather will be operating as an integral part of VersiFi with no immediate plans for raising outside funding," he said.

Law firms Simmons & Simmons, Morgan Lewis, Reitler Kailas & Rosenblatt and Seward & Kissel advised VersiFi and Ather on the deal, and neither company used an outside banker, Shalaby said.