Payments Firm Bolt Scraps $1.5B Proposed Acquisition of Crypto Firm Wyre

Bolt Financial Inc, a U.S. online checkout technology company, announced on Friday that it has pulled out from its $1.5 billion deal to buy crypto infrastructure provider Wyre Payments Inc, amid plunging valuations in cryptocurrency and fintech businesses.

Valuations have fallen across industries this year as the market has faced massive volatility. High-flying tech valuations have come under pressure this year as investor sentiment has been dampened by macroeconomic turmoil, a chill in the equity markets, and fears of a looming recession.

Fintech companies like payments processor Stripe Inc., and Swedish payments firm Klarna Bank AB, among others have seen a significant decline in their valuations.

Likewise, San Francisco-based Bolt whose valuation stood at $11 billion after a funding round in January, has also witnessed a cut in the intrinsic value of its stocks.  

In a statement on Friday, Bolt said it will continue its partnership with Wyre, but cited the need for it to remain independent to allow it to focus on its core areas.

“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 CEO Maju Kuruvilla said.

As reported by Blockchain.News, Bolt announced intent to acquire Wyre back in April this year, and the deal was expected to be completed before the end of 2022.

Market Pullback Discouraging Buyers

Industry valuations have declined significantly in the tech and crypto sector during a price crash over the past few months.

A number of planned mergers between crypto and web3 firms with SPACs are being delayed or canceled as a result of the recent market downturn.

This year has seen the valuations for public crypto companies have fallen by about 70%. However, market observers argue that these lower valuations could make these firms increasingly attractive targets for acquisition, and this activity has already begun to pick up.

Some larger crypto firms such as FTX, and Ripple, are already looking for acquisition targets to drive industry growth and to help them acquire more users.

In early July, FTX exchange, led by crypto billionaire Sam Bankman-Fried, launched plans to buy troubled crypto companies to stem potential credit contagion.

Last month, Ripple Labs expressed interest to buy assets from bankrupt crypto lending platform Celsius.

Market watchers feel that most of the M&A activity will be experienced in cryptocurrency, meaning that crypto firms acquire their fellow crypto companies, as opposed to traditional buyers.

However, according to market observers, there is still an opportunity for non-crypto firms to capitalize on these lower valuations and some are already doing so.