Foresight Ventures Acquires Majority Stake in The Block for $60M
Summary:
Singapore-based venture capital firm Foresight Ventures has acquired an 80% stake in crypto media company The Block, a deal valuing the company at $70 million. Despite the change in majority ownership, The Block will continue independent operations. CEO Larry Cermak remains the second-largest shareholder, with new roles for Foresight's executives. The deal is aimed at boosting Asian user patronage for The Block and distancing the company from past scandalous associations. Part of the acquisition funds will be channeled toward ad expenditure on The Block and control change conditions. This move comes amidst a bear market leading to substantial layoffs in crypto-based firms.
According to recent announcements, Singapore-based venture capitalist firm, Foresight Ventures, has acquired a significant majority share in The Block, a renowned media company specializing in cryptocurrency. The deal has positioned The Block at an impressive valuation of $70 million, with Foresight Ventures investing $60 million for a controlling 80% stake. Despite the takeover, The Block is expected to maintain autonomous operations, with Larry Cermak, CEO of The Block, retaining his position as secondary major shareholder. The ranks of The Block will see some reshuffling, however, as Foresight's CEO, Forest Bai assumes the Chairman’s role, and part-owner Tony Cheng acquires a seat on the board. Quoting Cermak, this new phase signifies a reinvigorating "fresh start" for The Block.
The acquisition aims to increase patronage from Asia, according to Cheng, banking on the burgeoning regulatory transparency and vibrant capital inflow within the geographic region. Interestingly, this acquisition offers an escape for The Block from association with the infamous FTX scandal. The media company's past links to the failed stock exchange and its former CEO, Mike McCaffrey, had been called into question when McCaffrey allegedly borrowed multimillion-dollar sums from FTX's founder and ex-CEO, Sam Bankman-Fried. Additional reports on this story await comments from Foresight Ventures.
In a side agreement, the venture capitalist firm pledged an undisclosed ad expenditure on The Block within the first year since acquisition. Majority of the funds from this investment deal were channeled towards buying out McCaffrey's stake, with the residual funds addressing a control change condition. Besides The Block, Foresight Ventures holds interests in several Asian-focused cryptocurrency media outlets, including Block Temp, Foresight News, and CoinNess, tailored for Mandarin-speaking and Korean audiences, respectively. With the ongoing bear market leading to substantial layoffs across crypto-based firms, Foresight Ventures is optimistic this investment will bolster The Block's growth. This March, The Block reportedly downsized its workforce by approximately 33%.
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Published At
11/13/2023 2:03:19 PM
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