Crypto payments and infrastructure provider company Wyre will reportedly end operations by the end of this month. The company, expected to clock ten years this year, was valued at a whopping $1.5 billion in April 2022.
Last year, Bolt Financial sought to buy the crypto payment platform. The firms had agreed to sustain their partnership and kickstart “a commercial agreement to adopt Wyre’s one-click solution for the Bolt customer platform.” However, the deal fell through in September.
The deal was supposed to be completed in cash and stock. But investors were wary of Bolt’s lofty $11 billion valuation amid a broader fintech selloff and rising doubts about the health of the one-click-checkout business model.
The two parties agreed that operating as independent organizations while remaining partners will allow them focus on their respective core competencies to deliver value to customers.
Wyre is the brainchild of Michael Dunworth and Loannis Giannaros. It was founded in 2013 and generated an impressive sum of $29.1 million across nine rounds of funding, according to data retrieved from Crunchbase. In its excellent ride, it partnered with noteworthy investors like Pantera Capital, Stellar Development Foundation, and Amphora Capital.
Michael Staib, who previously worked as a technical engineer for Wyre, posted on his LinkedIn profile on Dec. 31, 2022, that “Wyre won’t continue as a profitable business.” In the same vein, two former employees told Axios that Giannaros had sent an e-mail during the holiday season informing team members that Wyre would liquidate and terminate its offerings in January 2023. It is alleged that no payoff will be provided to employees.
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More details about Wyre’s meltdown
The company has not yet confirmed the shutdown officially. Different news outlets have reached out to Giannaros, but he has not responded. In an email sent to Axios, Giannaros said: “We’re still operating but will be scaling back to plan our next steps.” Dunworth relinquished his position from Wyre and received 12.5% of his holdings at the company soon after tech platform Bolt failed to acquire the firm in September 2022.
According to Dunworth, crypto market volatility and general market conditions in tech were the main reasons for the deal falling through. Fintech writer, Noah Weidner, suspects that the company may have experienced balance sheet issues as early as September.
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“I sent an email to Wyre some months back asking about their Yield product — largely because Wyre+Yield was used by a bunch of small CeDeFi and fintech apps,” he tweeted. “Their response insinuated Wyre+Yield had been closed for months, but some apps were still using it for their treasury.”
Wyre’s now-failed acquisition had been considered monumental, as the $1.5 billion valuation would have been one of the biggest non-SPAC deals. The payments platform’s decision to shut down operations may signify the prolonged crypto winter ahead. This news comes when the market hangs on a single lifeline, hoping for a firm resuscitation to save its face.
2022 was significant for the crypto industry with the downfall of Terra and the FTX cryptocurrency exchange. The broad market downturn, combined with the crash in cryptocurrency activity, has led to a shakeout among some struggling companies. The market downturn also saw a lot of other crypto firms letting members of their workforce go.
Though the bearish loop has been persistent, investors hoped and are still hoping for a positive turnaround. However, this recent update will dash the lingering hopes of many, while others who have lost total hope in the market will be justified that they moved on and looked away from the market.
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