US-based online payment processor PayPal is buying Israeli cryptocurrency security firm Curv as part of its push into digital tokens.
The deal’s financial terms were not disclosed, but it is expected to close in the first half of the year. The deal is expected to be worth less than $200 million.
The San Jose-based company said that the deal will help PayPal “accelerate and expand” its efforts to support cryptocurrencies and digital assets.
PayPal, which is used by over 375 million customers and retailers in over 200 countries, launched a new service in October that allows users to purchase, keep, and sell cryptocurrency. Besides, the company established a business unit dedicated solely to blockchain and cryptocurrency.
The company pointed out that “Curv will join the newly formed group, with its strong team of technologists adding technical expertise to PayPal”.
Mr. Jose Fernandez da Ponte, the company’s vice president and general manager for blockchain, crypto, and digital currencies noted that “the acquisition of the start-up is part of PayPal’s effort to invest in “talent and technology to realize our vision for a more inclusive financial system”.
At the end of trading on Monday, PayPal’s shares were down more than 5 percent. Over the last year, the company’s stock has increased by more than 122 percent.
Curv, which was established in 2018, provides global businesses with cloud-based infrastructure to protect their digital assets.
Itay Malinger Co-founder and Chief Executive Officer at Curv commented that “as the adoption of digital assets accelerates, we feel there’s no better home than PayPal to continue our journey of innovation. We are excited to join PayPal in expanding the role these assets play in the global economy”.
Earlier in July, Curv raised $23 million in funding from Commerz Ventures, Coinbase Ventures, Digital Currency Community, Team8, and the Digital Garage Lab Fund.
Franklin Templeton, an asset manager, and Illuminate Financial Management, a FinTech venture capital investor, joined the company’s rising list of investors last October. With their support, the company was able to raise a total of $30 million.
PayPal said last month that consumers who buy cryptocurrency have been coming to the platform at a rate twice their login frequency before they bought cryptos. Its most recent announcement comes on the heels of solid results in the fourth quarter of the previous year.
PayPal’s net profit increased 209 percent year over year to $1.6 billion in the October-December quarter, helped by increased payment volumes amid the COVID-19 pandemic. During that time, revenue increased by 23 percent annually to more than $6.1 billion. In 2020, the largest online payment service added 72.7 million new customers and processed $936 billion in payments, setting a new high.