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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 Acquiring WonderFi for C$250M

John Kennick
May 15th, 2025
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Transaction Overview

On May 13th, 2025, Robinhood, a leading online brokerage platform, announced a definitive agreement to acquire WonderFi Technologies, a Canada-based owner and operator of several regulated cryptocurrency platforms. The deal is valued at C$250M (US$179M) and is expected to close in the second half of 2025.

 

Target: WonderFi Technologies

WonderFi, founded in 2021 and headquartered in Toronto, Canada, is a regulated digital asset platform that owns, operates, develops, and invests in blockchain-based financial products. The firm offers access to cryptocurrency trading, staking, and decentralized finance solutions for both retail and institutional clients. WonderFi’s core products include: 1) Bitbuy, a Canadian cryptocurrency trading platform offering trading, staking, and OTC services to advanced traders and corporate clients; 2) Coinsquare, a cryptocurrency trading platform catered more directly to retail investors; 3) SmartPay, a payment solution enabling businesses to accept crypto payments and convert them to fiat currency; and 4) WonderFi Labs, the company’s development arm focused on building future applications and expanding offerings, including Wonder, a layer 2 blockchain built on Ethereum, and WonderFiWallet, a non-custodial wallet that will connect to WonderL2.

 

Since 2021, WonderFi Technologies has raised a total of C$114.1M through both public offerings and private placements. WonderFi is 78% publicly owned, with Mogo Inc., the largest single active investor, owning 13% of the company.

 

Buyer: Robinhood

Robinhood, founded in 2013, is a publicly listed brokerage platform headquartered in Menlo Park, CA. The platform has grown from allowing individuals to trade stocks and ETFs to stock options, index options, futures contracts, and cryptocurrency. Robinhood also offers cash management services such as direct deposit capabilities and debit cards.

 

In 2018, Robinhood established Robinhood Crypto, which enabled users to trade various cryptocurrencies on the exchange. Since then, Robinhood has steadily increased the number of cryptocurrencies and stablecoins available for trading on its platform, both in the US and abroad, a goal made evident by its June 2024 acquisition of Bitstamp, a European crypto exchange, for $200M.

 

Robinhood currently has a $46B enterprise value, with $3.26B in trailing twelve-month revenue ended March 2025 (14.1× EV / Revenue multiple) and $1.35B in trailing twelve-month EBITDA (34.1× EV / EBITDA multiple).

 

Transaction Parameters

The acquisition will be an all-cash buyout valued at US$179M. Shareholders will receive C$0.36 per share, representing a 41% premium on WonderFi’s May 12 closing price and a 4.0x valuation/revenue multiple based on ~C$62.1M in revenue following FY 2024, and a 20.8x EBITDA multiple based on ~C$12M in FY 2024 Adjusted EBITDA.

 

Notable similar transactions include Coinbase | Deribit for $2.9B (M&A Alert),  Hidden Road | Ripple (M&A Alert), NinjaTrader | Kraken for $1.5B (M&A Alert), FairX | Coinbase (M&A Alert), and

Robinhood | Bitstamp for $200M (M&A Alert). 

 

Strategic Rationale

This transaction offers Robinhood entry into the Canadian cryptocurrency market by leveraging WonderFi’s established user base, regulatory licenses, and platforms such as Bitbuy and Coinsquare, which collectively hold C$2.1B in assets under custody. Additionally, Robinhood’s revenue streams will likely be bolstered and diversified by WonderFi’s growth in crypto trading volumes, which increased by 28% in FY 2024. Finally, the acquisition allows Robinhood to enhance its crypto offerings by gaining advanced infrastructure in staking and wallet services, supporting Robinhood’s goal of becoming a comprehensive financial services platform.

 

Architect Partners’ Observations

The move is part of a larger “growth via acquisition” strategy that we’re seeing larger players enact, partly due to increased cash generation over the past several quarters and regulatory optimism.

 

Robinhood has been farther on the risk spectrum for crypto trading and is cementing its lead against TradFi brokerages (several large players do not offer crypto trading yet). While crypto is being treated as just another asset to trade, the volatility and the lighter regulatory best-execution frameworks mean it can be a more profitable segment for trading firms.

 

For Robinhood, it not only gives access to Canada as a market but can also boost its “share of wallet.” They can cross-sell trading in other assets to WonderFi clients, further eroding competitors that are slow to react. The price of the deal is a bit low at 4X; but considering it’s an all-cash deal, the premium can quickly decrease. It is at a 71% premium over the 30 VWAP (volume-weighted average).

 

Firms approach consolidation on an account basis, and Robinhood is paying ~$105 per account (regardless of activity) or ~$1,400 per active account. Coinbase, based on 2024 numbers, is roughly $550 per active account. So, considering lifetime value, this is a reasonable deal for Robinhood.

 

Stepping back and widening the aperture, we see larger players continuing to look for consolidation opportunities. Even though Coinbase, Kraken, and Robinhood have recently announced acquisitions, we feel there are more consolidation plays to come this year.

 

Sources

Robinhood Press Release, WonderFi, WonderFi Investor Deck,  2024 Q4 Report, Pitchbook, Factset