Visa in Advanced Talks to Acquire Israeli Crypto Firm Fireblocks for $2.5 Billion
Translated & summarized from Bizportal by baba
Visa is reportedly in advanced talks to acquire Israeli crypto infrastructure firm Fireblocks for about $2.5 billion, a valuation significantly lower than its 2022 peak. The acquisition would bolster Visa's position in the growing stablecoin market and follow a similar move by competitor Mastercard. Fireblocks provides digital asset infrastructure to financial institutions, focusing on stablecoins. The deal, if completed, would be a major exit for an Israeli fintech company and establish Israel as a key center for Visa's digital currency and security operations.
The story in 6 lines · by baba
- Visa is negotiating to buy Israeli crypto firm Fireblocks for approximately $2.5 billion.
- The reported price is about 70% less than Fireblocks' $8 billion valuation in early 2022.
- Fireblocks provides infrastructure for managing digital assets, with a focus on stablecoins.
- The acquisition would strengthen Visa's presence in the digital payments and stablecoin sector.
- This follows Mastercard's recent acquisition of UK-based stablecoin infrastructure firm BVNK.
- Visa previously acquired Israeli fraud detection company BioCatch for $2.4 billion.
Visa is reportedly in advanced negotiations to acquire Fireblocks, an Israeli-founded crypto infrastructure company, for approximately $2.5 billion. The deal, if finalized, would represent one of the largest exits for an Israeli fintech company, but also highlights a significant drop in valuations within the sector since the 2021-2022 peak. While the parties have not yet commented and terms may change, the reported price is substantially lower than Fireblocks' previous valuation. In January 2022, the company raised $550 million at an $8 billion valuation during a period of intense crypto investment. A sale at $2.5 billion would signify a roughly 70% decrease from that peak value. This valuation difference means later-stage investors might receive less than they invested, while early investors and preferred shareholders could still profit, a common outcome when sale prices fall below previous funding rounds.
Fireblocks provides banks, exchanges, and payment companies with infrastructure for managing digital assets, with a recent focus on stablecoins, which are digital currencies pegged to the US dollar. The company has expanded through acquisitions, including Dynamis for $90 million and Israeli accounting firm TRES Finance. For Visa, acquiring Fireblocks aligns with its strategy to integrate into the growing stablecoin payment and transfer landscape, allowing it to control infrastructure rather than compete with it. Visa has already reported significant growth in stablecoin-based card usage, with a nearly 200% increase.
The potential acquisition follows Mastercard's recent completion of its $1.8 billion deal for the UK-based stablecoin infrastructure firm BVNK. Visa's reported offer for Fireblocks, while higher, likely reflects the Israeli company's larger operational scale. Visa has prior experience with acquisitions in Israel, having recently purchased BioCatch, a fraud detection company, for $2.4 billion. These two acquisitions would establish Israel as a key hub for Visa in digital currency infrastructure and security.
The report emerges amid a mixed crypto market, with Bitcoin and Ethereum experiencing recent declines. Traditional financial institutions' interest appears to be shifting from coin prices to payment infrastructure, especially as US regulation clarifies, with a recent opening for interest on stablecoins despite bank opposition. For Visa shareholders, the acquisition's financial impact is expected to be limited due to the company's large market capitalization. However, the price paid will serve as a crucial benchmark for other crypto infrastructure firms that raised funds at high valuations in 2021-2022, indicating that strategic buyers are interested in technology and customer bases but at significantly lower multiples.
Strategically, Visa aims to ensure its continued involvement in payments, even as transactions potentially move to blockchain networks. For the Israeli tech ecosystem, this potential deal reinforces a trend of major US financial companies acquiring Israeli technology in fraud, cyber, and digital payments. The actual return for employees with stock options will depend on the company's capital structure and share priority, details that may become clearer upon an official announcement.
