Apr 6, 2018

Coinbase is in talks to acquire Earn.com

Earn founder and CEO Balaji Srinivasan. Photo by Steve Jennings/Getty Images

Digital currency exchange Coinbase is still in talks to acquire Earn.com, 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.
Keep that last point in mind when you think about valuations of other crypto-related companies like Ripple. Traditional equity is only part of the capital equation.

Coindesk last month reported early talks between the two companies.

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Coinbase is in talks to acquire Earn.com

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