Checkr Acquires Inflection
Checkr Acquires Inflection

On April 12, 2022, Checkr announced the acquisition of B2B online background screener Inflection for approximately $400mm according to the WSJ. Architect Partners served as the exclusive financial advisor to Inflection.

Inflection is the leader in online background checks focused on the small and medium-sized business (SMB) market segment. Their highly automated platform provides fast, accurate, and cost-effective solutions with the top customer satisfaction ratings in the industry. Inflection’s core offering is GoodHire, which mainly provides pre-employment background checks to over 100,000 SMB companies. GoodHire supports over 100 screening services (drug tests, education & employment verification, etc.), delivered through their easy-to-use online platform or via API, and services a broad range of verticals including construction, healthcare, retail, and technology.

Inflection was founded in 2006 as a consumer-focused background check provider that shifted focus to the SMB market segment with the launch of GoodHire in 2013. The company is currently led by CEO Mike Grossman, COO Max Wesman, and CFO Jared Waterman. Since its inception, the company has raised $30 million from Sutter Hill Ventures (Gregory Sands) and Matrix Partners (Josh Hannah). The company has not raised outside capital since 2010.

Inflection has the leading market share in the SMB segment for pre-employment background screening. Larger, legacy background check providers that focus more on large enterprise customers include First Advantage (NASDAQ: FA), Sterling Check (NASDAQ: STER), and HireRight (NYSE: HRT).

Checkr is a background check provider founded to service the rapid background check needs of large gig economy businesses such as Uber, Lyft, and Instacart. Their platform now also offers solutions to SMB and enterprise customers across several verticals including healthcare, technology, retail, and more.

Founded in 2014, Checkr is headquartered in San Francisco, California. It is led by CEO Daniel Yanisse and has over 500 employees, serving over 15,000 enterprise customers. Over the last 8 years, Checkr has raised $560mm in equity funding through 6 rounds, with their latest series E round valuing them at $4.6B. Major investors in the company include Durable Capital Partners, Fidelity, Franklin Templeton, Coatue Management, T. Rowe Price (Corey Shull), Accel (Richard Wong), GV (Jules Maltz), Khosla Ventures, and several others.

Historically, Checkr has made two acquisitions, both focused around delivering higher quality data to clients and increasing process efficiencies. They acquired Lymus in October 2018 and ModoHR Technologies in February 2022, both deals had prices undisclosed.

Background checks have become an increasingly common part of the hiring process for the majority of firms across the United States. With legacy providers such as HireRight, Sterling Check, and First Advantage seemingly focused more on large enterprise sales than on offering modern, automated online services, there is significant room for innovation and increased efficiency in the market. Checkr successfully reduced friction for demanding, high-volume gig economy employers via their automated API solution and has been moving downmarket into enterprise and mid-sized clients, while Inflection reduced friction for the SMB market segment through automation and a user-friendly UI and has been moving up market into the enterprise segment.

Through this acquisition, Checkr will significantly expand their fast-growing SMB business segment. Inflection brings Checkr tens of thousands of new SMB customers and some very strong data science capabilities based around collecting and cleansing people data. This makes Checkr the new leader in the SMB segment, and positions them to be able to offer a highly automated background screening offering to all market segments

M&A Alerts

Coinbase Acquires One River Digital Asset Management

March 3rd, 2023 Ayush Mishra

Transaction Overview

On March 3rd, 2023 Coinbase announced the acquisition of the digital asset management firm, One River for an undisclosed amount. 


Target: One River Digital Asset Management

One River Digital Asset Management (ORDAM) is an SEC-registered, cryptocurrency investment management and advisory firm. The company offers institutional investors access to digital assets like Bitcoin, Ethereum, other cryptocurrencies, and blockchain-related companies. It’s based in Greenwich, Connecticut with additional offices in New York and Singapore. One River is split into two primary investment vehicles: the One River Digital Asset Fund and the One River Digital Bitcoin Fund. These offer institutional clients investment solutions, and advisory services, and implement their proprietary trading algorithms to create value for their clients.


One River’s closest competitors are other digital asset management firms such as Grayscale, WisdomTree, Bitwise Asset Management, Coinbase Asset Management, Fidelity Digital Assets, and ARK Invest.


The company was founded in 2019 by Eric Peters and Sebastian Bea. Both founders have extensive experience in the finance and technology fields. Peters and Bea lead the firm’s ~50 employees. One River has also ventured into the carbon-neutral Bitcoin space by launching a firm that focuses on mitigating the environmental impacts of Bitcoin mining. One River has raised $56M in capital over two rounds, with the latest round from September 2021 at a $186M post-money valuation. Former investors include Goldman Sachs (lead), Infinity Capital Partners, Liberty Mutual Insurance, and Coinbase Ventures. 


Buyer: Coinbase (NASDAQ: COIN)

Coinbase is one of the largest players in the cryptocurrency exchange and digital asset space. The company is well-known with 110 million users in over 100 countries. Coinbase also provides a variety of institutional-grade services for finance professionals in the digital asset industry including an institutional trading platform, custody solutions, and prime brokerage services. Coinbase is one of the first cryptocurrency exchanges to go public, and the company is listed on the NASDAQ, with a current equity value of $14.5B and an EV / LTM revenue multiple of 4.1x. 


Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam. Armstrong is the current CEO, leading the firm’s ~3,000 employees. The company is headquartered in San Francisco, California, and has offices in New York, Chicago, Tokyo, and London. 


Coinbase has been a leading acquirer in the crypto space, previously acquiring FairX (2022), BtcTurk (2022), Unbound Security (2021), BRD (2021), Bison Trails (2021), and Tagomi (2020).


Transaction Parameters

ORDAM, a subsidiary of One River Asset Management, was acquired by Coinbase for an undisclosed amount. ORDAM will transition to become Coinbase Asset Management (CBAM).


Comparable digital asset management transactions include Huobi | About Capital Management, | Altonomy ($250M), Gemini | Omniex, Deutsche Borse | Crypto Finance ($108M).


Strategic Rationale

Often, buyers and sellers have an existing relationship, which holds true in this case. Coinbase invested in One River’s Series A and had been a close partner for several years leading up to this acquisition, demonstrating the “Acquire your Acquirer” approach to driving premium value M&A. Coinbase followed this road and found a natural way to expand their product scope and firm strategy while still focused on the crypto industry.


Specifically, this transaction fulfills two strategic rationales:

  1. Continued investment in the institutional business line. Expanding their institutional offering through ODAM’s Separately Managed Account (SMA), Coinbase can continue to offer additional services to their growing segment. Coinbase has increasingly become institutionally focused, with 80% of trading volumes in 2022 being institutional and roughly 25% of the 100 largest hedge funds in the world by assets under management are Coinbase customers. 
  2. Recurring revenue. Pricing for SMAs is asset-based, so the revenue is a (relatively) consistent flow and can help diversify from the volatile trading revenue.  


Architect Partners’ Observations

Crypto-focused asset management is a very narrow tightrope to traverse.  With the SEC’s continued rejection of Bitcoin-based Exchange Traded Funds (ETFs) and recent messaging of the “qualified custody” requirement of crypto for wealth managers, regulatory uncertainty is a damper on the sector. Institutionally focused products, such as ORDAM’s, are an area that has more leeway.  While there are other firms with a similar focus, many have plateaued in growth.  While there are other asset manager players, will this prompt others to find a new home in a larger firm?


This transaction also signals a future vision of what exchanges may become – all-encompassing financial services firms (much like many, many other TradFi firms). Coinbase’s sole dedication to the crypto sector is becoming a differentiator in itself.



PitchBook, Coinbase Website, One River Website, Press Release