Digital wallet provider Mogo has agreed to invest approximately $56.4m in Canada-based cryptocurrency trading platform Coinsquare for a 19.9% stake.
The deal, which is expected to close in the first quarter of 2021, includes the right for Mogo to acquire an additional 20% stake in Coinsquare from current shareholders.
The two companies already had a multi-year relationship, with Coinsquare acting as the trading platform for Mogo’s cryptocurrency services product, MogoCrypto, which launched in 2018.
Founded in 2014, Coinsquare operates an online trading platform for cryptocurrencies such as Bitcoin and Ethereum. The company also provides a wealth management service for qualified individual investors and institutional clients.
Coinsquare reported trading volumes of over $525m for January 2021.
David Feller, CEO of Mogo, said: “We believe strongly in the growing importance of cryptocurrency in the financial wallets of consumers, and deepening our relationship with Coinsquare will enable us to bring enhanced functionality and value into the MogoCrypto product.”
Following the close of the deal, Mogo will receive the right to appoint a nominee to Coinsquare’s board of directors, while Coinsquare will also secure a position on Mogo’s board of directors.
Should certain conditions be met, Mogo would receive the right to appoint a second representative to Coinsquare’s board.
In 2018, Coinsquare raised $23.8m of equity funding led by financial services firm Canaccord Genuity, while Bitcoin mining company Riot Blockchain als took part.
The company had received $8.3m in a series A round from an unnamed global asset manager in 2017.