Bakkt, the NYSE-listed crypto and loyalty company, is spending up to $200 million to acquire Apex Crypto, which enables fintechs and trading apps to integrate cryptocurrency trading. Bakkt is a digital asset platform founded by NYSE owner ICE that combines crypto trading with loyalty, including integrating mainstream rewards programs.
Apex Crypto provides a turnkey solution targeted at fintechs so they can incorporate crypto into their offerings. The solution includes account opening, trading, and custody. It doesn’t yet offer staking or NFTs but plans to.
The $200 million deal includes $55 million in cash at closing and $45 million by the end of the year, subject to performance. An additional $100 million could be paid based on performance through 2025.
Bakkt is buying Apex Crypto from the larger Apex Fintech Solutions and has inked a deal to provide Bakkt’s crypto offering to Apex’s 220 fintech clients.
“We found a unique asset in Apex Crypto, which will expand our crypto client base, provide us with faster speed to market for new crypto capabilities and serve as an additional avenue for continued sales to a crypto-savvy audience through Apex Fintech Solutions,” said Gavin Michael, CEO of Bakkt. “With the addition of this complementary business, we believe we are poised to be a crypto provider of choice for financial institutions, fintechs, merchants or loyalty programs.”
Last year, Mastercard partnered with Bakkt to be able to launch a crypto-as-a-service to Mastercard customers, although it was not an exclusive relationship. The card company recently announced a similar deal with Paxos.
Bakkt was founded by NYSE owner ICE in 2018 and initially launched crypto derivatives. In 2020 it completed a $300 million Series B round, with a large slice of that earmarked to acquire Bridge 2 Solutions. The technology firm provides solutions to 4,500 loyalty and employee incentives schemes. A year later, Bakkt launched its rewards app. Undoubtedly rewards will be a major blockchain and crypto application, but Bakkt was perhaps a little early.
In 2021 Bakkt was listed through a SPAC deal with an enterprise value of more than $2 billion. Shortly after the SPAC merger concluded in October 2021, the stock price hit $42, but today is just $2. ICE owned a 68% economic interest in the firm at the time of the listing and last week announced it had written down the value of its holding from $1.5 billion in June 2022 to $400 million on September 30.