Coinbase acquires Echo to build end-to-end on-chain capital markets from seed to token listing

Let's grab more time next time. We'll talk soon. Bunch more questions, but thanks for coming. Have a good rest of your day. Uh our next guest is already in the ream waiting room, but first let me tell you about Adio customer relationship magic.

Adio is the AI native CRM that builds, scales, and grows your company to the next to the next level. We have Sean from Coinbase coming back into the TB Pan Ultra. Sean, how are you doing? Hey guys, good to see you again. Good to see you again, too. Uh, take us through the news.

Would love to go deeper on the acquisition. Uh, but also I just want to get an update on anything else that's happening in the Coinbase universe. Yeah, well, we're super pumped yesterday to announce the acquisition of Echko, which is the leading onchain capital formation platform.

We obviously we had a little bit of fun with it on Twitter and meet up on Monday even despite all the AWS uh outages that were giving us uh a little bit of the sweats. Um and is that the first time an NFT has been taken through like a corporate M&A process? Yeah, definitely unprecedented. I mean a little bit easier.

You can imagine the uh the trying to explain that to our lawyers and tax consultants uh when you're buying a company like wait you want to also do an NFT thing.

So uh yeah I think it was unique and of one thing it was uh you know obviously very specific to this acquisition given the founder of Ekko is Jordan Fish Kobe who uh you know I think he's very much intertwined with crypto lore and upon only is very much intertwined with crypto lore.

So, we just thought it would be a cool creative way to get the crypto community really jazzed up and excited because everybody's been raving about and uh asking for him to bring Up Only back. It Yeah, it was I think like the M&A announcement of the year.

It was it was the best executed like build a bunch of intrigue, hype, controversy even in some realms, but then ultimately deliver a really positive story. It was exactly what you want out of like M&A comms, which is sort of the least sexy thing you could possibly do. It's usually really boring.

Just a number and, you know, a couple paragraphs on like synergies and like, you know, everyone's like, "Okay, congrats. " Uh, but this one was really well executed. I want to know more about the vision for I I we were talking to Brian Armstrong about this yesterday.

The vision for the next generation of crypto companies. They raise money onchain with Echo. What does their world look like over the next few years as they scale in the Coinbase ecosystem? What products are they pulling off the shelf? What are they taking advantage of?

Uh what does the whole like being a Coinbase native business feel like? Yeah, good question. So, uh you know, Coinbase historically has been primarily a secondary exchange uh for when you list a token. That's where price discovery happens and that's where uh you know, most of the trading activity is.

But by the time a uh issuer actually issues that token, it's actually pretty late in the life cycle. So with Echko and then a number another company that we acquired over the summer called liquify, which is sort of like a you could think about like a Carta for crypto companies that helps you manage your token table.

Um, it allows us to have a relationship with the token issuer basically from inception all the way through those private fundraises and uh potentially a public fund raise to listing on the exchange which we think about as sort of like the crypto IPO in some ways.

Um, and then after the fact uh we continue to serve that issuer through a business account that uh they can use to manage just sort of the operations of their business.

um they can grow using uh Spindle, which was another acquisition that we did earlier this year, which uh is sort of an onchain ads protocol that helps you find distribution. Um and I think our broader vision for it exactly the legend. Yes. Yeah.

So, we're we're pulling in all the talent and all the legends into Coinbase. Yeah. Um uh I'm I Brian was talking a little bit about uh bringing access to earlier stage investing to a broader community. Obviously there's a bunch of uh regulation in the mix. I I don't really care about the legal understanding.

I want to more know more about the philosophical underpinnings of of who gets exposure to what. There's a take that's like everyone should be able to invest in anything.

There's also like even though you have to be an accredited investor to invest in a startup, you don't have to be an accredited investor to have money in a pension fund that winds up in a venture capital firm that gave money to a company to a VC firm.

I think one interesting thing on Coinbase is like you you can you know exactly like you have you don't know exactly but you have a good sense of who's a qual would be a qualified investor by the assets that they custody on Coinbase.

It's a very natural thing of like knowing like hey these 200,000 people or whatever the number is like have have enough assets just in you know digital assets that they would be qualified as a Sure. Sure. Sure. Yeah. So yeah philosophically what are you thinking?

Yeah, I mean we think that everybody should have the opportunity to invest in these uh uh in these companies. You know, I think like private companies are have for too long been restricted uh from an access perspective to large venture capitalists and quote unquote accredited investors.

And I think Jordy like assets that you have are one indication potentially of like sophistication or insensitivity to loss. But uh the perverse side of that equation is it potentially locks a lot of people out from the most compelling investments that uh are out there.

And we want to help people be early basically and give people the shot at being early. Um and so obviously we you know we need to follow accreditation uh uh rules as they stand. U but hopefully those change over time as well.

And with Ekko's infrastructure, you know, anybody can invest in a seed round or a series A round starting with crypto tokens and then even beyond that uh looking at traditional companies as well.

How how uh how early do you typically start meeting with you know potential uh acquisition acquisitions like are these I imagine with liquify and and uh echo I know the conversation I'm sure the conversation started like at least a year in advance but uh what does that actually look like? Uh it's kind of variable.

I think with uh Echko, you know, we had known Jordan and Kobe uh for quite a while and so we we I was chatting with him when he we start he started the company. Uh but we started to really work a lot more together earlier this year when we actually partnered.

So Ekko has a angelist like product where you could start an investment group and then sponsor investments effectively and syndicate those out.

Uh and so we started an investment group for co under coinbase ventures for the base ecosystem fund where uh investments that we were making we would actually let the community follow along with us and invest in those same companies uh because you know that's something that we heard a lot of demand for particularly within the base ecosystem um and I think as we started to work together more you know that broader vision of hey we can actually enable internet capital markets and eko you have the infrastructure coinbase has the size, scale, and distribution.

So, there's potentially some magic that could happen if you bring those two together. Those conversations really materialize uh and ultimately, you know, culminated in this week. Well, congratulations. I'm going to ring the gong. Hit that gong. Thank you for stopping. Fantastic work. I'm sure you'll be back