Companies
PayPal Leads $52M Funding Round for Crypto Wallet Startup Magic
In its latest move in the digital asset space, US payment giant and company PayPal has led a $52 million strategic funding round for wallet-as-a-service (WaaS) provider Magic.
In an announcement on Wednesday, May 31st, Sean Li, Magic’s co-founder, and CEO, disclosed that it had closed its $52 million funding round led by PayPal Ventures, with participation from Cherubic Ventures, Synchrony, KX, Northzone, and Volt Capital. The announcement reads:
“Today marks a monumental milestone for Magic as we announce that we have closed our strategic funding round with $52 million, amidst one of the most tumultuous macroeconomic environments. The round was led by PayPal Ventures, with participation from Cherubic, Synchrony, KX, Northzone, and Volt Capital.”
We're thrilled to announce our latest funding of $52M backed by @PayPal @cherubicvc @synchrony @northzoneVC @VoltCapital @KX. Magic is solving web3 onboarding and our mission is to give a wallet to every internet user.
👇 Read morehttps://t.co/9tdZsH3lxH
— Magic (@magic_labs) May 31, 2023
Web 3 Startup Raises $80M So Far
Magic is a wallet-as-a-service (WaaS) provider launched in 2018 for companies seeking secure and easy solutions to onboard their customers to web3 by allowing instant non-custodial wallet creation. By implementing Magic’s software development kit (SDK) in their code base, vendors can enable their users to instantly create wallets using existing email, social, SMS, or federated logins.
Magic claims to have enterprise-ready features and compliance with the Systems and Organization Controls 2 Type II (SOC2 Type 2), the California Consumer Privacy Act (CCPA), the European Union’s General Data Protection Regulation, ISO, and more. The wallet creation through Magic provides an all-in-one user onboarding package, including authentication, fiat on-ramps, nonfungible token (NFT) minting and NFT checkout.
It claims to be a WaaS success story, with more than 20 million unique wallets generated to date. According to CEO Sean Li, its SDK is used by over 130,000 developers and its proprietary scalability technology “produces upwards of 2,000 wallets per second (WPS) versus the fastest alternatives at 80-100 wps.”
Its customers are some of the most trusted brands across retail, music, fashion and gaming, including Mattel, Macy’s, Xsolla, Immutable, and more. Furthermore, the startup is working with many Fortune 500 companies to bring their web3 use cases to everyday users. The investment from companies like PayPal reinforces “Magic’s position as an industry-leading wallet-as-a-service (WaaS) provider,” said Sean Li.
The latest $52 million funding brings Magic’s total raised capital to over $80 million. Alan Du, Partner at Paypal Ventures, stated:
“Mass adoption of web3 is a hot topic, and Magic is facilitating this with a safe and simple solution. Magic’s wallet creation service allows companies to reach millions of users on their apps and onboard customers who are new to web3. We’re proud to be investing in Magic and believe the company will help drive the growing number of web3 use-cases amongst global brands.”
Web 3 and crypto wallet startups have attracted noticeable investment in recent years. As reported, crypto wallet provider Ledger raised $108 million in March 2023 at a valuation of $1.4 billion after a surge in demand for self-custody. ConsenSys, the leader of Web 3 thanks to its MetaMask wallet, raised $200 million at a $3.2 billion valuation in November 2021.
