Coinbase (NASDAQ:COIN) has announced its acquisition of Echo, an onchain capital formation platform for approximately $375 million. Established by Cobie, a crypto investor and supporter of community-focused investing, Coinbase is now well positioned to challenge the established securities crowdfunding sector as digital assets go mainstream.
Coinbase explained in a blog post that they wanted to create more accessible, efficient, and transparent capital markets. However, the crypto exchange claims that founders tend to struggle to raise funding and individual investors don’t typically get the chance to invest in private token sales.
Echo addresses this by enabling initiatives to raise funds directly from their community, either via a private sale or by self-hosting a public token sale using Sonar. Typically, offerings are issued under Reg D or Reg S.
Coinbase is expected to expand support to tokenized securities as well as real-world assets in the foreseeable future, all while leveraging Echo’s infrastructure.
Echo has reportedly made progress in opening up private markets helping projects secure $200M+ over ~300 deals since inception. Its self-hosted public token sale product Sonar has experienced success as well. It helped power Plasma’s XPL token sale.
With this acquisition, Coinbase said it is building a full-stack solution for early stage ventures and investors, “covering everything from launch to fundraising to secondary trading.” Qualified investors register once and then are displayed offerings where they have eligibility, driven by location. All investments are made via USDC.
Echo complements the recent acquisition of Liquifi, which streamlines token creation as well as cap table management.
