Digital Currency Group (DCG), the Bitcoin venture investment firm of SecondMarket founder Barry Silbert, has acquired the industry publication, CoinDesk. The editorial and business teams at CoinDesk will be relocated to New York where they will merge with DCG’s events platform, forming a new subsidiary.
Investors have poured about $2 million into CoinDesk since its launch in 2013 but the acquisition payout was only $500,000 to $600,000 after months of looking for a buyer willing to put up $1 million, according to TechCrunch. This failure to recoup its funding or even secure its exit goal, is not unusual for a startup venture, but it does show the problem with running a professional bitcoin only news publication.
The industry is still just emerging and companies are still very young, which makes getting big advertisers difficult. At the same time, bitcoin and blockchain technology are attracting more media coverage from wider publications crossing over into the field such as Finance Magnates from online trading and TechCrunch from internet technology.
Another thing that this acquisition exemplifies is that the industry is maturing, institutionalizing, and congealing into larger consortiums. DCG’s portfolio includes Genesis Global Trading, an institutional-focused digital currency trading desk, and Grayscale Investments, an asset manager that manages the Bitcoin Investment Trust (Symbol: GBTC). And in its announcements the group indeed emphasises that its backing will “provide CoinDesk with financial strength, strategic flexibility, and an invaluable relationship network that extends far beyond the bitcoin industry itself.”
Viberate Teams Up with Blockparty to Deliver World’s First Live Event NFTGo to article >>
DCG says it is committed to maintaining CoinDesk’s editorial independence, and therefore the CoinDesk team will be located in separate offices in New York following the move. The responses online to the announcement suggest that not all people believe this will be the case or that it matters considering CoinDesk’s previous stance, but some friction is expected when any industry is in its growing pains.
— Barry Silbert (@barrysilbert) January 13, 2016
Back in October 2015 we reported that DCG has secured investment from a number of established players in the financial industry. Among them are MasterCard, the Canadian Imperial Bank of Commerce (CIBC), Bain Capital Ventures, CME Ventures, FirstMark Capital, New York Life Insurance, Novel TMT Ventures, Oak HC/FT, RRE Ventures, Solon Mack Capital and Transamerica Ventures.