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eResearch| Voyager Digital (CSE:VYGR | OTC:VYGVF | FRA:UCD2), a cryptocurrency brokerage service provider in the U.S., recently announced the acquisition of Coinify ApS, a cryptocurrency payment platform, for $84 million. With this acquisition, Voyager adds its name to the institutions that have entered into the crypto payment space.
Voyager Digital is a crypto-asset brokerage company that provides crypto asset trading solutions to retail and institutional investors in the U.S. Deploying a smart order routing and execution management system, it offers a cryptocurrency trading platform through an easy-to-use app. The Company allows users to trade in over 60 cryptocurrencies with interest rates that go up to 12% on assets on deposit.
Founded in 2014, Coinify is a cryptocurrency payment platform that offers services to both consumers and businesses and has users in over 150 countries. Coinify allows users to buy or sell cryptocurrency and provides solutions to enable payments in virtual currencies using the Coinify API.
Voyager-Coinify Acquisition Potential
The Coinify acquisition provides Voyager with a reputable and powerful gateway to the crypto payment industry in Europe, Asia, North America, and South America.
Coinify’s services include payment processing in 15 major cryptocurrencies and transaction settlement in 20 fiat currencies using an Application Programming Interface (API).
With the acquisition, Voyager plans to accelerate its international expansion, as well as use Coinify’s global cryptocurrency payment platform to enhance its capabilities in the digital payment space. The deal also fast-tracks Voyager into the business-to-business payment world.
According to Voyager, its customers will soon be able to make Business-to-Business (B2B) and Business-to-Consumers (B2C) payments directly from their digital asset accounts through the Voyager app. Voyager believes the move will add new users to its existing customer base, which currently stands at 1.75 million.
Voyager also plans to offer real-time crypto rewards to users through its app. For every payment made, users will receive tokens as a reward. Token holders maintaining average minimum balance will initially earn 7% staking rewards at the end of each month, and after the first year, they will be able to vote on the future staking yield.
Stephen Ehrlich, CEO and Co-Founder of Voyager stated “Coinify’s core values of innovation, security, and scalability are perfectly aligned with Voyager’s mission of making digital assets accessible throughout the world.”
Consideration
Under the terms of the acquisition, Coinify shareholders will receive 5.1 million shares of Voyager and $15 million in cash. Voyager’s shares closed the previous trading day prior to the announcement at C$16.90. As part of the deal, Voyager will retain $5.5 million of cash on the Coinify balance sheet.
Voyager believes the transaction will be immediately accretive to both revenue and cash flow. Voyager will retain all current employees of Coinify and enter into employment agreements with key people in the management team.
A total of 3.28 million shares, out of the 5.1 million shares that will be issued to Coinify investors, are subject to a lock-up period of one year from the closing date or until Voyager gets listed on NASDAQ.
Digital Payments Could Hit $6.6 Trillion in 2021
The growth of the digital payments industry was already on a steep trajectory but when the COVID-19 pandemic forced consumers online, the number of global shoppers doing digital payments increased by nearly 50%
According to Finaria.it, the global digital payments industry is expected to hit $6.6 trillion in value in 2021, an increase of 40% from 2019. This scenario is also expected to boost transactions using cryptocurrency payments.
Since March 2021, PayPal (Nasdaq:PYPL) the payment platform, has allowed users in the U.S. to pay in cryptocurrency with various global merchants.
Crypto payments are the next big step in Voyager’s growth plan, whose user base has grown over 1400% in the first six months of 2021. Voyager plans to capitalize on these growth opportunities and provide payment options to its customers, many of whom are small to mid-size businesses.
According to data compiled by The Block, since the beginning of 2021, Voyager has consistently had the highest valued stock among crypto companies and it has also experienced a stock price increase of more than 6,000% since February 2020.
