Two boutique investment banking advisory practices in the crypto market have merged ahead of an expected deal-making frenzy in 2022.
Architect Partners, a Palo Alto-based M&A firm, announced on Thursday that it has, rather fittingly, merged with Emergents in a deal the firms hope will create the "go-to crypto M&A and financing advisory firm." The newly merged company will boast 12 people post-transaction — a figure its executives believe makes it one of the largest M&A firms dedicated exclusively to crypto M&A.
Of course, there's competition. Galaxy Digital — the crypto bank run by Mike Novogratz — has its own M&A practice, which played a role in FTX's acquisition of Blockfolio. Even Wall Street's largest deal smiths are playing a role in various types of deals. For instance, Citi is serving as Galaxy Digital's advisor in its pending acquisition of BitGo.
Outside of Galaxy's announced acquisition, 2021 was a busy year for crypto M&A with nearly 200 acquisitions, according to The Block Research. Some of that activity was driven by players like Coinbase, which snapped up Bison Trails and wallet firm BRD.
Credit card company Mastercard announced its acquisition of crypto sleuthing company CipherTrace, while popular equities broker Robinhood announced its first crypto acquisition in December.
Architect expects the activity to pick up even further in 2022.
"We anticipate a number of M&A themes to play out in 2022, many of which began to play out in 2021 but are still relatively nascent," noted Architect Partner's managing director Eric F Risley.
Risley, who's team has helped close more than 300 deals topping $25 billion in value in the technology sector, expects crypto market infrastructure firms as well as data and analytic firms to sit center stage.
"The crypto investing and trading space is becoming increasingly sophisticated and crypto firms are reacting directly to this by increasing their capabilities," he said.
"The need for high-quality market data that institutional investors can rely on is paramount and financial institutions must be able to assess their exposure to crypto assets."
Emergents — which is affiliated with Weild & Co — is led by real estate developer Elliot Chun.