Payward, the parent company of cryptocurrency exchange Kraken, acquired Magic Labs' embedded wallet business through an asset purchase, according to The Block. The wallet operation will be integrated into Payward Services as part of the transaction. Financial terms of the deal were not disclosed. The acquisition represents a strategic consolidation move in the embedded wallet infrastructure space, which has become a contested segment of crypto technology. Magic Labs had previously raised more than $80 million in total funding, including a $52 million round led by PayPal Ventures in 2023.
Payward Structures Deal as Asset Purchase
The transaction was structured as an asset purchase rather than a full company acquisition. Under this arrangement, Payward acquired the embedded wallet business and its underlying infrastructure without absorbing Magic Labs as a corporate entity. The wallet operation will move to Payward Services, the division of Kraken's parent company focused on infrastructure and service offerings.
The asset purchase structure allows both parties to proceed independently after the transaction. Payward obtains the wallet product and technology, while Magic Labs retains the ability to pursue separate business objectives under a new identity.
Magic Labs Rebrands as Newton Labs
Following the sale of its embedded wallet business, Magic Labs will rebrand as Newton Labs. The company stated it will redirect its focus entirely to developing Newton Protocol. The rebranding and strategic pivot represent a complete departure from the embedded wallet product line that Payward acquired.
Magic Labs Raised Over $80 Million Before Acquisition
Magic Labs had secured more than $80 million in total funding prior to the Payward acquisition. The most significant fundraise occurred in 2023, when PayPal Ventures led a $52 million investment round for the company. The participation of PayPal Ventures, the investment arm of the global payments company, reflected institutional interest in embedded wallet infrastructure technology at that time.
Undisclosed Financial Terms Limit Deal Assessment
Payward and Magic Labs did not disclose the financial terms of the acquisition. The absence of valuation information prevents external analysis of whether the transaction represented a premium acquisition or a discounted strategic sale. The undisclosed terms leave open questions about the deal's financial structure and the relative negotiating positions of both parties.
FAQ
What did Payward acquire from Magic Labs?
Payward acquired Magic Labs' embedded wallet business through an asset purchase. The wallet operation and its underlying infrastructure were transferred to Payward Services as part of the transaction.
How much funding had Magic Labs raised before the acquisition?
Magic Labs raised more than $80 million in total funding, including a $52 million round led by PayPal Ventures in 2023, before completing the sale of its embedded wallet business to Payward.
What will Magic Labs do after selling its wallet business?
Magic Labs will rebrand as Newton Labs and shift its focus to developing Newton Protocol, representing a complete strategic pivot away from the embedded wallet product line.
