The German exchange operator is splashing out several hundred million to buy Switzerland's Crypto Finance AG, in a bid to expand in regulated digital assets.
Frankfurt-based Deutsche Boerse is buying a majority stake in the Zurich start-up, the latter company said in a statement on Tuesday. Deutsche Boerse said it invested a «moderate three-digit Swiss franc million» for two-thirds of the fintech, without disclosing any other financial terms of the transaction.
For the German firm, the deal represents the chance to expand its offering of digital assets with a direct entry point, including post-trade services such as custody. It has been vocal in the past about building a reliable, fully regulated ecosystem in Europe for digital assets.
Weighty Financial Backers
Crypto Finance's founder and CEO Jan Brzezek as well as the current management team will continue to lead the company and retain significant personal holdings, the company said. Bernadette Leuzinger runs the fund arm, and Crypto Finance in December poached Rupertus Rothenhaeuser from SDX to manage its brokerage arm. Stijn Vander Straeten runs its storage activities.
It marks a huge exit for the four-year-old firm, which counts Swiss fund-of-fund billionaire Rainer-Marc Frey, private banking scion Raymond Baer, entrepreneur Tobias Reichmuth, investor Daniel Gutenberg, and hedge fund expert Philippe Cottier among its backers.
Asian, European Money
Frey and Lingfeng Capital, a private equity fund based in Asia, led an $15 million funding round last year which included existing and new investors from Europe and Asia, including QBN Capital in Asia. Lingfeng partner Ming Shu join the company's board following the funding.
Crypto Finance won a Swiss asset management nod early on, and a securities house license for its brokerage arm five months ago. Brzezek, a former UBS banker, has never been shy about his desire to more closely link up traditional finance with his firm.
Bridging Existing And New
He told finews.com last month that the Swiss wealth management giant, where he was first a trader and then worked in asset management until founding his own firm, would be a «plausible» fit for Crypto Finance.
On Thursday, Brzezek said «Since the beginning, our goal was to bridge the old and new worlds. This is why we are excited to team up with a neutral partner like Deutsche Boerse, who (sic) brings trust, reputation, and expertise in traditional financial market infrastructure.»
