The Giving Block, which last year processed $70 million in cryptocurrency donations for nonprofits, will be acquired for at least $54 million by payment processor Shift4 (NASDAQ: FOUR).
The deal includes $54 million in up-front consideration and a potential earn-out of up to $246 million — 75% stock and 25% cash consideration mix for both.
The announcement came Tuesday as Shift4 reported Q4 and full year earnings for 2021. Total revenue was $1.367 billion for 2021, up from $766.9 million in 2020, with gross profit of $278.4 million, up from $177.8 million in 2020.
The Giving Block’s $5 million in 2021 revenue represents about 20 times year-over-year growth with expectations to double revenue in 2022 and at least $5 million adjusted EBITDA contribution in 2023, according to Shift4’s presentation to shareholders. The Giving Block has 60 employees.
The Washington, D.C.-based firm reported the volume of crypto donations on its platform soared to almost $70 million 2021, up from $4.2 million in 2020, and the number of nonprofits accepting crypto donations growing tenfold, from about 100 in 2020 to more than 1,000.
Allentown, Pa.-based Shift4 Payments is perhaps best known for its founder and CEO, Jared Isaacman, leading the first all-civilian space mission into orbit. The journey was part of the Shift4Cares program’s Inspiration4 campaign, which raised $240 million for St. Jude Children’s Research Hospital.
The company went public in June 2020 on the NASDAQ. It opened Tuesday at $49.81 per share, down more than 5% from Monday’s close of $52.65. The stock’s 52-week range is $43.08 to $104.11.
The firm has about 1,166 employees and processes more than $200 billion in annual payments volume for hotels, restaurants, entertainment and other sectors.
Shift4 will invest further in The Giving Block’s successful strategy while also pursuing more than $45 billion embedded cross-sell opportunity by bundling crypto donation capabilities with traditional card acceptance, according to the company’s letter to shareholders. That’s a fraction of the more than $470 billion nonprofit addressable market that Shift4 will be able to pursue.
The acquisition also brings a team of cryptocurrency and blockchain technical talent who will establish a Crypto Innovation Center at Shift4 and integrate crypto acceptance and settlement capabilities across Shift4’s current offerings in a wide range of verticals.
“Cryptocurrency is quickly moving beyond early adoption and becoming increasingly mainstream as more people want to invest, transact, and donate in crypto,” Isaacman said via a statement. “We intend to be at the forefront of this movement and leverage The Giving Block technology across the entire Shift4 enterprise.”
Shift4 also announced an agreement to acquire Finaro, a cross-border eCommerce payments provider with a large European presence, for $525 million in up-front consideration (about 62% equity, 38% cash consideration mix) and up to $50 million earn-out (100% equity). The two acquisitions are expected to contribute more than $15 billion of end-to-end payment volume and $35 million of adjusted EBITDA in 2023.
“These two acquisitions build on the momentum from our recent investor day and underscore our aggressive efforts to deliver a unified commerce experience across the world,” Isaacman said via a statement. “These deals clearly show our ability to support existing transformational and global customers like SpaceX Starlink and St. Jude Children’s Research Hospital and provide a real right-to-win additional customers across the nonprofit vertical. It also represents an exciting and responsible step towards further embracing cryptocurrencies and blockchain technology.”
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