Monday, April 9, 2018

Andreessen Horowitz Investee Coinbase May Buy Andreessen Horowitz Investee (né

That's one way to exit. was not mentioned in April 4's "Crypto M&A: "Three Startups Coinbase May Have Its Eye On"" because it's such a Tesla/SolarCity-cousins-shouldn't-marry type of deal.

Yet here we are. From Axios:

Coinbase is in talks to acquire
Digital currency exchange Coinbase is still in talks to acquire, a paid inbox service formerly known as 21 inc., Axios has learned from multiple sources.
  • No done deal yet (or maybe ever), but current discussions are at a purchase price north of $100 million (plus management earn-outs) with Coinbase insisting that Earn founder and CEO Balaji Srinivasan come over as CTO.
Why it matters: As 21, the company helped raise the early profile of Bitcoin among Silicon Valley investors.
  • Andreessen Horowitz has stakes in both companies, and is said to have recused itself from board-level negotiations (although former A16Z partner Srinivasan remains a "board partner" with the firm).
  • Earn originally originally was developing chips and hardware for cryptocurrency mining. It has since pivoted to crypto-based messaging technology, which some believe could someday be used to accept/decline online advertising.
  • If the equity value ended at around $120 million it would basically be break-even for Earn's Series C investors, given stock preferences, but earlier backers will be easily in the black because of Earn's early cryptocurrency activities.
...MORE, including a CoinDesk link we somehow missed.

We've been intrigued by the oddity that is since the Financial Times' Izabella Kaminska pointed it out in a couple 2015 posts:
Sept. 23
21 (grams of digital coke)
May 19 
21 Inc and the plan to kill the free internet
And some of our prior thinking:

March 16
"Announcing Coinbase Index Fund"
Coinbase, and the things Coinbase is doing seem to be a more realistic way for Andreessen Horowitz to make money out of Bitcoin than their 21.Co. (see below)...

November 2017
So, What Has Andreessen Horowitz Crypto Investee Been Up To?
Not much.
We've been following this one for a couple years (links below) and still can't figure out how they convinced investors to pony up $121,050,000 including the whopper $116mil., 13 investor Series B lead by A16Z (CrunchBase)

That B round closed on March 10 2015 and the next day Fortune reported:
Why March 10 was a big day for bitcoin...
March 2017
Remember 21.Co, The Andreessen Horowitz Investee In Search Of A Business?
And do you remember our "Marc Andreessen is tweeting again" post last month?
Here's the rest of the story.... 

For more on Coinbase see January's:
"Coinbase Strategy Teardown: How Coinbase Grew Into The King Midas Of Crypto Doing $1B In Revenue" 
Coinbase is the Andreessen Horowitz backed cryptocurrency play that's working out. is the one that isn't....