Payments company Bolt abandons $1.5B deal to buy crypto firm Wyrebit2main
The online checkout company Bolt Financial Inc. announced Friday that it has ended its $1.5 billion deal to acquire cryptocurrency infrastructure firm Wyre Payments Inc. by mutual agreement, according to a report from Reuters.
The deal, announced in April, would have been the largest acquisition for Bolt, which provides an e-commerce one-click checkout service for retailers. Bolt reportedly received a valuation of $11 billion after a $355 million funding round earlier in the year.
The addition of Wyre would have permitted the two companies to allow retailers to provide seamless, native crypto transactions for goods and services as well as easy onboarding for buying cryptocurrency.
The deal fell through after Bolt’s business began to decline as a result of reduced fees it charged merchants. Revenue had fallen during the first quarter year-over-year. In May, the company laid off 250 employees and in June Bolt said that it would need to further cut costs as monthly losses continue to accrue.
The April announcement to acquire Wyre also came amid “crypto winter,” a broad downturn amid crypto markets that saw cryptocurrencies such as Bitcoin fall almost 70% from all-time highs in November. In May, markets took a turn for the worse when the Terra stablecoin collapsed, causing its sister cryptocurrency Luna to lose 99% of its value in less than a week, which led to a ripple effect across markets.
The collapse of Terra has led to numerous other knock-on effects in the industry with lenders and brokers going bankrupt including Voyager Digital, Celsius Network and the hedge fund Three Arrows Capital.
Payments processor Stripe and fintech Klarna Bank also took significant valuation cuts during the market downturns as investors began to peel back estimates during the past few months.
This isn’t the first time a major crypto deal fell through recently, digital asset management firm Galaxy Digital terminated a $1.2 billion deal to acquire the enterprise cryptocurrency wallet startup BitGo Inc. last month.
Bolt said in a statement that although the deal fell through, it would continue a partnership with Wyre. The company further explained that remaining independent would allow it to focus on what it’s good at and incorporate Wyre’s functionality to give users a seamless, native crypto buying experience.
“We will continue our existing commercial partnership with Wyre to pave the path of crypto integration into our ecosystem, bringing Wyre’s innovative crypto infrastructure to the world,” Bolt’s chief executive Maju Kuruvilla said.