U.K.-based digital currency platform Ziglu is reportedly searching for a new buyer while also trying to raise capital to help it survive the coming weeks.
The digital currency exchange is looking to raise $2.5 million at a $12.3 million valuation, which will allow it to continue providing services to its customers, according to a Sky News report. It remains unclear if Ziglu will be able to raise the needed funds given the string of catastrophes facing the virtual currency markets.
However, the prospects of a new buyer show significant promise as insiders confirm that the company has opened talks with a number of potential buyers. There are reports that an army of investment bankers has been brought on board to facilitate a deal.
Ziglu confirmed to its investors that it will be tapering some of the services that it currently offers in a valiant effort to reduce costs. To ensure that operations run on a lean budget, the digital asset firm disclosed that it has halted the onboarding of new customers until it achieves an injection of new capital.
Things started to tear at the seams for Ziglu after a planned acquisition by U.S. brokerage platform Robinhood (NASDAQ: HOOD) fell through. The deal, worth $170 million, was terminated after Robinhood slashed its offer by over 60%, triggering a wave of financial difficulties for the startup.
Last month, Ziglu’s founder Mark Hipperson exited his role as CEO in a move that hinted at the extent of the company’s travails. Hipperson revealed via LinkedIn that he will remain as a director and shareholder while expressing belief in the company’s future.
“As a founder, it’s never easy to step away from something you’ve built from the ground up, but I feel it’s the right time for me to take a step back and pursue new opportunities,” said Hipperson. “Despite the recent collapse of the Robinhood deal, I am proud of what the team and I have accomplished and I know that Ziglu has a bright future ahead.”
Ziglu was founded in 2018 and has gone on to garner thousands of users, buoyed by the ‘crypto’ bull run of 2021. Despite the financial turmoil, the firm remains wholly regulatory compliant, being one of the first three firms to gain approval to dabble in virtual assets from the U.K.’s Financial Conduct Authority (FCA).
Some deals slip through the cracks
Failed acquisitions in the virtual currency space are not a new occurrence given the inherently volatile nature of the sector. Thailand’s leading lender SCBX famously scrapped its planned $500 million acquisition of digital asset exchange Bitkub, citing a number of regulatory compliance issues.
BitMex suffered the fate of a failed acquisition after its plans to buy a 272-year-old German Bank Bankhaus von der Heydt collapsed. Voyager Digital was left in limbo after lengthy discussions over a sale to FTX fell through as they hoped that a new deal with Binance.US would sail through.
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