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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

Robinhood acquires BitStamp

Michael Klena
June 7, 2024
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Robinhood Acquires Bitstamp for $200 Million in Cash Consideration

Transaction Overview

On June 6, 2024, Robinhood (NASDAQ: HOOD), a multi-asset retail brokerage, announced its acquisition of Bitstamp, a European crypto exchange, for $200M in cash. The deal is expected to close in the first half of 2025.

 

Target: Bitstamp

Bitstamp is one of the oldest crypto exchanges, founded in 2011. Their key offerings include crypto trading for retail and institutional investors, staking and lending, and advanced trading tools.

 

The company has a global licensing regime that includes 50 active licenses and registrations across Canada, Italy, France, Luxembourg, Spain, The Netherlands, the US (New York BitLicense 40 state  MTLs), the UK, and Singapore. 

 

According to FCA filings, Bitstamp’s UK entity has delivered estimated revenue in line with other large exchanges of $55M, $58M, and $118M in 2019, 2020, and 2021 respectively. In 2022 the firm estimated $31M in revenue with a  $7.5M loss.

 

Founded in 2011 by Nejc Kodrič and Damijan Merlak, Bitstamp now has over 350 employees. The company had raised $19.4M over three funding rounds. In 2018, Belgian private equity firm NXMH acquired an 80% stake in the company at a $500M valuation. Other minority shareholders were Ripple, Pantera, Broslyn Capital, VironIT, and MV Global.

 

Buyer: Robinhood (NASDAQ: HOOD)

Robinhood is an online retail broker that revolutionized the brokerage industry with their commission-free model. Today, they have expanded their offering to include stocks, options, crypto, and a subscription service that offers enhanced features. 

 

In 2021, Robinhood expanded its crypto trading capabilities by acquiring Cove Markets. In 2022, the company partnered with Circle to offer USDC stablecoin within the Robinhood ecosystem.

 

In the last twelve months, Robinhood has done $2.04B in revenue and $668M in normalized EBITDA. The firm currently has 23.9M funded customers and 13.7M monthly active users. Q1 2024 crypto revenues were $126M, up 232% year-over-year. As of March 31, 2024, Robinhood custodies $26.2B in crypto assets, an increase of $11.5B since December 31, 2023. 

 

Founded in 2013 by Vladimir Tenev and Baiju Bhatt, Robinhood now has over 3,800 employees. The company has raised over $7.5B through 11 equity funding rounds, with key investors including Sequoia Capital, Andreessen Horowitz, Google Ventures, D1 Capital Partners, and DST Global. In July 2021, Robinhood went public via an initial public offering (IPO), valuing the company at approximately $32B. Today the company has a market cap of $20.2B and trades at an EV / LTM revenue multiple of 7.4x and an EV / LTM normalized EBITDA multiple of 22.6x. The stock is currently up 85% YTD in 2024. 

 

Transaction Parameters

Robinhood acquired Bitstamp for $200M in an all-cash deal. The deal is subject to regulatory approval and is expected to close in the first half of 2025. 

 

In FCA filings, Bitstamp’s UK entity revenue was $31M in 2022.  We estimate the last twelve months’ revenue of approximately $25M using a trading volume / revenue ratio from historical reported periods.  This results in an EV/revenue multiple of 8x.  This compares to Robinhood’s current equivalent valuation multiple of 7.4x, as highlighted above.

 

This is the middle of the pack for their comparables, but nearly half of Coinbase’s revenue multiple: 

 

        Coinbase: 14.7x Enterprise Value / LTM Revenue Multiple

        Bakkt: 4.6x Enterprise Value / LTM Net Revenue Multiple

        Galaxy: 6.9x Enterprise Value / LTM Revenue Multiple

 

We will update EV / revenue multiple as Robinhood publishes their relevant public filing. The deal represents a significant discount from the $500M valuation in the 2018 majority investment.  

 

Strategic Rationale

Crypto continues to take an increasingly important role in Robinhood’s business, accounting for 20% of total revenue in Q1 2024. Despite receiving a Wells notice from the SEC in May 2024, the company continues to expand its crypto business.  This acquisition instantly expands global reach to ensure participation regardless of US actions. It also expands the institutional offering, which positions Robinhood as one of the few publicly traded crypto-influenced companies that will be able to serve institutions as they come into the digital asset space.

 

Architect Partners’ Observations

Bitstamp is a prime asset due to its long operating history and global licensing reach. We feel Robinhood valued the global reach and the institutional business the most and acquired at a reasonable price.  The stock market reaction was positive as well, trading up 7% on the news.

 

On valuation, this deal is an important marker of the current market, albeit with a small sample size.  Valuations have right-sized again and parties on both sides are beginning to bridge the recent gap in expectations.  The deal also shows the value of cash as a form of consideration to allow the facilitation of transactions.  Often, in today’s M&A market, equity is offered as a large component of consideration, creating a myriad of challenges to transaction completion.

 

For the industry, we view bridge transactions – where traditional finance acquires a crypto-native – as a strongly positive indicator.  Consolidation will continue for crypto exchanges and more traditional finance participants will broaden the potential acquirer universe.  

 

Sources 

PitchBook, Bitstamp Website, Robinhood Website, FCA Filings