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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

Payward to Acquire Reap for up to $600M

Eric F. Risley
May 8th, 2026
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Transaction Overview

On May 7th, Payward, the parent company of crypto exchange Kraken, announced that it had entered into a definitive agreement to acquire Reap, a Hong Kong-based stablecoin-native card-issuing and payments infrastructure company, for up to $600 million, payable in a mix of cash and Payward stock.

 

Target: Reap

Founded in 2018, Reap is a Hong Kong-based, stablecoin-native card-issuing and payments platform that operates across both fiat and stablecoin rails through a unified API.

 

Reap’s core offerings include: 1) Reap Direct, a stablecoin-embedded business account that bundles corporate Visa credit cards, cross-border payments, and expense management across stablecoins and fiat; 2) Embedded Finance, an API platform for card issuing and global fiat payouts, enabling clients to launch branded card programs and payment products on Reap’s rails; and 3) Agentic Payments, which enables AI agents to transact on behalf of individuals and businesses.

 

Reap has expanded its regulatory footprint across Hong Kong, Singapore, and Mexico, with strategic partnerships including Circle, Solana, Visa, and Paxos. In December 2025, Reap joined the Global Dollar Network alongside Kraken, Anchorage Digital, Bullish, OKX, Robinhood, and Worldpay, with plans to integrate Paxos-issued USDG into its card programs, cross-border settlement tools, and embedded finance systems.

 

Reap processed more than $2 billion in stablecoin-funded transaction flow in 2024. In 2025, both revenue and transaction volume nearly tripled, and the company reached profitability that same year. As of May 2026, Reap serves more than 22,000 businesses worldwide; named clients include Animoca Brands, Trust Wallet, CoinMarketCap, Amber Group, and RedotPay.

 

As of its publicly announced Series A financing in October 2022, Reap had raised $40 million through a combination of equity and debt financing. The Series A was led by Acorn Pacific Ventures, Arcadia Funds, and HashKey Capital, with participation from Hustle Fund, Fresco Capital, Abacus Ventures, and Payment Asia. Reap’s broader investor base has also included Global Founders Capital and Oyster Ventures.

 

Key competitors and adjacent providers include BVNK (Mastercard), Bridge (Stripe), Rail (Ripple), Baanx (Exodus), AlloyX (Solowin), Zero Hash, and Airwallex.

 

Buyer: Payward

Payward is the parent company of Kraken. Originally the legal entity behind Kraken, Payward was repositioned in February 2026 as a multi-brand holding platform. Payward currently encompasses Kraken (its primary business), NinjaTrader, Breakout, Backed Finance, xStocks, and CF Benchmarks, as well as Payward Services, its B2B infrastructure arm.

 

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.

 

Payward has built significant payments momentum over the past two years, moving from stablecoin distribution into consumer and enterprise payment infrastructure. The foundation began with Kraken’s role in the Global Dollar Network and USDG, expanded through Krak’s P2P fiat and stablecoin payment app, and was reinforced by Kraken Financial’s Federal Reserve master account, which connects Payward more directly to U.S. fiat settlement rails. The launch of Payward Services then formalized payments as part of a broader B2B infrastructure platform, while the Reap acquisition added the card issuing, cross-border payout, and stablecoin treasury capabilities needed to push that infrastructure deeper into real business workflows.

 

Transaction Parameters

Payward has agreed to acquire Reap for up to $600 million, payable in a mix of cash and Payward stock issued at a $20 billion equity valuation. The specific breakdown is not disclosed. Reap will continue to operate as a stand-alone platform within the Payward ecosystem under its existing brand and leadership team, led by Daren Guo.

 

Anchoring on a blended fee rate of 50 bps, equivalent to Reap’s stated bank transfer fee (source), and applying a +/- 10 bps sensitivity range, Reap’s revenue on $6 billion of estimated 2025 volume would be approximately $24 million to $36 million. This would imply a transaction revenue multiple of approximately 16.7x to 25.0x.

 

Previous comparable transactions include: Mastercard | BVNK ($1.8B, M&A Alert), Stripe | Bridge ($1.1B, M&A Alert), Solowin | AlloyX ($350M, M&A Alert), Ripple | Rail ($200M, M&A Alert), and Exodus | Baanx ($175M, M&A Alert).

 

Strategic Rationale

Payward Services already provides the crypto-native infrastructure layer, spanning trading, custody, tokenized assets, on- and off-ramps, derivatives, funding, liquidity, compliance, risk management, and settlement. Reap extends that stack into payments distribution by adding card issuance, corporate card programs, cross-border payouts, and stablecoin treasury workflows through a single API-driven platform.

 

The combination matters because stablecoin payment products are difficult to build independently. Partners would otherwise need to stitch together card issuing, banking partners, fiat rails, stablecoin settlement, custody, FX, compliance, and liquidity. With Reap, Payward can offer a more complete embedded finance stack that helps partners launch products, allowing end users to hold, convert, spend, and move money across fiat and stablecoin rails without rebuilding each component themselves.

 

Reap also expands Payward’s regulatory and geographic reach. The company brings licenses and registrations across Hong Kong, Singapore, and Mexico, including a Singapore Major Payment Institution license, a Hong Kong Money Service Operator license, and a Mexico Money Transmitter Registry. Reap accelerates Payward’s expansion across APAC and the Americas, while Payward’s U.S. and European licenses open new corridors for Reap. Together, the businesses are positioned to scale stablecoin-powered payments infrastructure across high-growth markets, including MENA and Latin America.

 

Architect Partners’ Observations
The Reap acquisition reinforces Payward’s evolution from a crypto exchange operator into a multi-brand financial infrastructure holding company. Kraken remains the flagship brand, but recent acquisitions show Payward expanding across trading, derivatives, tokenized assets, payments, custody, benchmarks, and B2B infrastructure. NinjaTrader added futures brokerage and retail derivatives distribution, Bitnomial added regulated U.S. derivatives infrastructure, Backed / xStocks expanded its tokenized securities footprint, CF Benchmarks supports institutional data and indexing, and Reap now adds global cards and stablecoin payments.

 

The strategic rationale is not simply that Payward is trying to build another Coinbase. Coinbase remains the clearest example of the “Everything Exchange” model, with a unified Coinbase-branded platform spanning trading, custody, staking, wallets, stablecoins, Base, derivatives, and on-chain commerce. Payward appears to be choosing a different aggregation layer: the regulated infrastructure stack that can power financial products across multiple brands, customer segments, and partner channels.

 

That distinction helps explain the holding company strategy. Rather than forcing every capability into a single Kraken-branded front end, Payward can serve different markets with purpose-built brands while sharing infrastructure underneath. Through its brands, Payward is building a modular platform across liquidity, custody, payments, tokenized assets, derivatives, benchmarks, and embedded finance.

 

The so-what is distribution leverage. Coinbase’s model depends on bringing more activity into Coinbase’s own platform. Payward’s model can work even when the end customer never interacts with Kraken directly. Banks, fintechs, brokers, payment companies, marketplaces, and enterprises can use Payward’s infrastructure to embed crypto trading, custody, stablecoin settlement, card programs, treasury workflows, or tokenized asset capabilities into their own products.

 

In our view, Payward is helping define the next evolution beyond the “Everything Exchange”: an “Everything Financial Infrastructure” model. If Coinbase is building the most complete branded crypto financial platform, Payward is assembling the regulated infrastructure stack that can power many financial platforms.

 

Sources 

PitchBook, Press Release, Payward, Kraken, Reap