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Payward Acquires Magic Labs Embedded Wallet Business
Payward Acquires Magic Labs Embedded Wallet Business

Transaction Overview
On July 27, 2026, Payward, the B2B crypto infrastructure parent behind the crypto exchange Kraken, announced a definitive agreement to acquire wallet-as-a-service business Magic Labs. Financial terms of the transaction were not disclosed.

Target: Magic Labs (Wallet Infrastructure)
Founded in 2018 and headquartered in San Francisco, Magic Labs is a wallet-as-a-service infrastructure provider that enables businesses to create non-custodial embedded wallets for their end users. The company was co-founded by Sean Li, Arthur Jen, and Jaemin Jin.

Magic’s core offering is a developer-facing SDK and API that provides embedded wallets with passwordless authentication via email, social login, passkeys, or SSO. The product suite includes 1) API Wallets for server-side management with security and customizable key sharding, and 2) Embedded Wallets for client-side non-custodial key management. As of July 2026, the platform supports more than 30 blockchain networks and provides a white-label UI, fiat onramps, and transaction signing.

As of July 2026, Magic Labs had provisioned more than 60 million wallets and served more than 200,000 developers across more than 18,000 applications. Clients include Polymarket, Naver, Helium, Forbes, WalletConnect, Mattel, and Immutable. During the 2024 U.S. presidential election, Polymarket processed over $3 billion in prediction market transactions with zero downtime, powered by Magic’s embedded wallets. Magic said it had supported over $8.9 billion in cumulative transaction volume for Polymarket as of November 2025.

Magic Labs has raised a total of $83 million in disclosed venture funding across 4 rounds, with significant investors including PayPal Ventures, Northzone, Tiger Global, Digital Currency Group, CoinFund, and Placeholder VC.

In November 2024, Magic Labs announced Newton, a chain unification network built in collaboration with Polygon Labs, expanding beyond wallet infrastructure into cross-chain protocol development. In November 2025, Magic Labs integrated the Newton Protocol SDK across its developer network. The company described Newton Protocol as “the authorization layer for on-chain finance.” These moves preceded the company’s decision to divest its wallet business and refocus entirely on protocol development.

Buyer: Payward
Founded in 2011 and headquartered in San Francisco, Payward is a private B2B crypto infrastructure holding company. Payward operates Kraken, one of the longest-running cryptocurrency exchanges, alongside NinjaTrader, xStocks, Bitnomial, and CF Benchmarks. The company is led by co-CEOs Arjun Sethi and Dave Ripley.

Most relevant to this transaction, Payward operates Payward Services, a B2B infrastructure platform that provides institutions with access to Payward’s trading, custody, settlement, and payments infrastructure via API. The acquisition of Magic Labs adds embedded wallet infrastructure to their offering. In April 2026, Payward launched a white-label fiat-to-crypto onramp through a partnership with Onramper, making embedded wallet infrastructure a natural adjacent capability.

Payward has been expanding beyond its core exchange through acquisition. In 2025, the company acquired NinjaTrader for $1.5 billion (retail futures, M&A Alert) and agreed to acquire Backed Finance (tokenized equities, Press). In 2026, it acquired Magna (token lifecycle management, Press), completed the acquisition of Bitnomial for up to $550 million (regulated derivatives, M&A Alert), and agreed to acquire Reap for $600 million (card issuance and payments, M&A Alert). Including this transaction, Payward has announced or completed 8 acquisitions since early 2025, committing several billion dollars to platform expansion ahead of its planned public listing.

For the full year of 2025, Payward reported adjusted revenue of $2.2 billion, a 33% increase year over year from $1.5 billion in 2024. Trading-based revenue accounted for 47% of the total, with the remaining 53% from asset-based services, including payments, custody, yield, and financing.

In November 2025, Payward raised $800 million at a $20 billion post-money valuation in a round backed by Citadel Securities, Jane Street, and Apollo Global Management, and confidentially filed an S-1 with the SEC ahead of a planned IPO. In April 2026, Deutsche Börse Group made an additional $200 million strategic investment in the company.

Transaction Parameters
Payward has signed a definitive agreement to acquire the wallet-as-a-service business of Magic Labs for an undisclosed amount. The transaction includes Magic Labs’ embedded wallet business, including wallet clients and associated infrastructure.

The transaction is part of a broader corporate restructuring in which Magic Labs is rebranding as Newton Labs to focus on the Newton Protocol. The two companies will remain independent following the close.

Architect Partners served as the exclusive financial advisor to Magic Labs.

Strategic Rationale
Payward is acquiring Magic’s embedded wallet business to augment Payward Services’ B2B offering. Payward Services gives partners a single integration point for trading, custody, tokenized assets, on/off-ramps, and derivatives. The wallet, the account layer where end users actually hold assets and interact with onchain products, was a critical piece partners still had to source from a third party. Magic brings that layer in-house with proven infrastructure: a TEE-based signing solution, an embedded integration layer, and a developer SDK that together have provisioned more than 60 million wallets and supported over $10 billion in stablecoin volume for 200,000+ developers.

On Day 1, Payward can offer fintechs, enterprises, and financial institutions a complete embedded onchain offering under a single provider, spanning wallet provisioning, onboarding, funding, trading, custody, and settlement, without stitching together multiple vendors. Every embedded wallet also becomes a distribution point that routes transaction volume into the rest of Payward’s infrastructure, deepening the non-trading, less volatile revenue that already accounts for 53% of Payward’s total as it heads toward a public listing.

Architect Partners’ Observations
This transaction marks the near-completion of a consolidation wave in embedded wallet infrastructure. In roughly one year, Fireblocks acquired Dynamics ($90M), Consensys acquired Web3Auth ($50M), Stripe acquired Privvy, Ripple acquired Palisade, and Paxos acquired Fordefi. Now each group has its own independent wallet infrastructure provider, and Payward has acquired the category’s pioneer. The market has reached a clear verdict: embedded wallets are foundational infrastructure for every onchain product, and they are a layer of a full-stack platform rather than a standalone business.

The logic is simple: the wallet is becoming the account primitive of onchain finance. Whoever provisions the wallet sits at the front of the customer relationship and routes the volume that follows. For platforms whose trading revenue is inherently cyclical, owning the onboarding layer converts market position into durable, recurring B2B infrastructure revenue.

Sources
Press Release, Payward Services, PitchBook

Alerts

BitGo Raises $100 Million

Michael S. Klena
August 17, 2023
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The company has now raised a total of $169.5M over seven funding rounds, with their Series B funding of ~$43M, led by Valor Equity Partners, taking place in December 2017.

Transaction Overview

On August 16, 2023, BitGo raised $100 million in Series C funding from new strategic investors at a $1.75B valuation. 

 

Company Description

BitGo is an NYDFS-regulated qualified custodian (QC) providing custody, financial services, and core infrastructure to over 1,500 institutional clients globally. The company is the leading crypto custodian, processing 20% of all Bitcoin transactions by value, and has top-tier clients such as Nike, Bitstamp, Pantera, eToro, and Mysten Labs. Since the beginning of 2023, new clients have grown by over 60%.

 

BitGo has three core offerings: 1) custody, 2) prime brokerage services, and 3) BitGo settlement network (Go Network). BitGo’s core custody offering includes hot, cold, and self-custodial wallets along with a “wallet-as-a-service” offering for web3 applications that creates and manages wallets for end-users. Launched in May 2020, BitGo Prime offers trading, lending, liquidity, and staking services to institutional clients. Since launch, staking services have increased by 40x. Earlier in 2023, the BitGo Settlement Network or Go Network was launched, seeking to replace the void left by the shutdown of SEN and Signet. Through BitGo Trust accounts, institutional clients can instantly transfer and settle digital and fiat assets. BitGo has created a closed-loop system that keeps clients’ assets in a secure, qualified custodian (BitGo) and enables them to have full BitGo Prime interoperability (trading, lending, staking, etc). Currently, OTC desks, exchanges, hedge funds, broker-dealers, lenders, payment processors, and security token issuers are actively utilizing the platform. 

 

BitGo was founded in 2013 by Mike Belshe and Ben Davenport and is headquartered in Palo Alto, California. The firm has ~100 employees and is led by CEO Mike Belshe.

 

Funding

The company has now raised a total of $169.5M over seven funding rounds, with their Series B funding of ~$43M, led by Valor Equity Partners, taking place in December 2017. The current Series C round puts their valuation at $1.75B. Previous investors include Goldman Sachs, Galaxy Digital, and DRW.

 

BitGo plans to use the funding for strategic acquisitions in the fintech infrastructure and services space and global expansion. The company had plans to acquire Prime Trust in June, however, that acquisition was terminated due to Prime Trust’s bankruptcy. 

 

Competition

BitGo competes with other crypto custody and infrastructure firms, as well as groups involved in payments. Some examples include Fireblocks, Copper, Anchorage Digital, Komainu, Coinbase Custody, Hex Trust, and BCB Group. 

 

Architect Partners’ Perspective

The main theme driving this capital raise is simple: trust wins.

 

BitGo continues to be a trusted custodian for the institutional digital asset ecosystem and has been since its inception in 2013. Since its founding, there have never been any security breaches or incidents that would lead to mistrust. While many others struggle with hacks and security, BitGo has thrived, with increased client onboarding by 60% since January 2023 driving a 20% AUC increase. 

 

Another consideration impacting the crypto trading sector is the US regulators considering separating the various functions of crypto execution (execution, custody, lending, etc) to help reduce counterparty risk for crypto customers. Nasdaq’s decision to not pursue crypto custody is a clear sign that this regulatory concern is real and roles within the trade lifecycle of crypto are becoming more clear. 

 

Today the market dynamics of late-stage crypto financings continue to be challenging. By this time last year, there had been 56 capital raises greater than $100M totaling $12.9B in capital raised. This year to date there have been only 8 deals greater than $100M totaling $1.2B in capital raised. The reason for the large downturn is that despite the negative crypto market pressures, venture capitalists are still requiring significant growth to invest. With the vast majority of late-stage crypto companies seeing declining revenues, only a select few can raise capital. 

 

Sources 

PitchBook, Company Website, Press Release