One-click payment company Bolt is no longer acquiring Wyre, the crypto payments company it agreed to buy for around $1.5 billion in April.
why is it important: The deal was considered the largest non-SPAC acquisition by a crypto company when it was announced.
- Another way to look at it now that we’re in less frothy times: the deal may have been too expensive.
Drive the news“Bolt and Wyre have mutually agreed to continue their partnership as independent businesses,” the companies said in a statement.
- “Operating as independent organizations while remaining partners will allow both parties to focus on their respective core competencies to deliver value to customers.”
The context: The transaction was to be concluded in cash and shares.
- But investors are wary of Bolt’s lofty $11 billion valuation amid a financial tech sell-off and growing doubts about the health of the pay-per-click business model.
- Rival Fast notably closed its doors in April.
In parallel, The cryptocurrency frenzy that served as the backdrop for the deal has also died down since the deal was announced.
- Private equity and venture capital funding in the space hit $2.7 billion in the second quarter, about half the amount raised in the prior quarter based on S&P data.
- Another major deal, Galaxy Digital’s acquisition of Bitgo for $1.2 billion, was also terminated in August.
To note: Wyre CEO Ioannis Giannaros was expected to lead Bolt’s crypto strategy after the deal closes.
Why it matters 2.0: Crypto has yet to live up to its promises as a payment method. But every time the price of the asset class rises, investors pour millions into projects aimed at facilitating crypto transactions.
- The dead deal signals another step back from that hope.