Mastercard said to weigh Zerohash investment after ending takeover talks worth billions
The credit card giant is considering a strategic investment in Zerohash as opposed to buying the company outright, according to people familiar with the transaction.
- Mastercard's plan to buy Zerohash was stymied by the blockchain infrastructure company's decision to remain independent.
- Instead, the payments processor is evaluating making a strategic investment in the firm, according to sources.
- Reports last year said Mastercard was in late-stage talks to acquire Zerohash in a deal valued as high as $2 billion.
Mastercard (MA) is considering making a strategic investment in blockchain infrastructure firm Zerohash after acquisition talks collapsed when the crypto company opted to remain independent, according to a person familiar with the matter.
Fortune reported in October that the payment processor was in late stage talks to buy Zerohash, and could pay as much as $2 billion for the firm, which provides custody, settlement and fiat on-/off-ramps so that fintech companies and brokerages can offer digital assets without building the plumbing themselves.
Those talks have ended, according to three people who spoke on condition of anonymity as the matter is private. Nevertheless, investment discussions are in progress, according to two of the people.
Mastercard declined to comment.
"We are not entertaining an acquisition by Mastercard. We respect the Mastercard team and look forward to scaling commercial partnerships," a Zerohash spokesperson said in emailed comments. "Our team is central to our velocity, and we believe that remaining independent best positions Zerohash to continue innovating, building and delivering for our customers."
Crypto merger and acquisition activity is on the rise. CoinDesk reported last week that crypto data platform CoinGecko was looking for a buyer for around $500 million.
As dealmaking returns to the industry, the most attractive M&A targets are no longer speculative protocols, but proven infrastructure projects with revenue and regulatory footing. Likely candidates include licensed exchanges and brokerages that offer instant market access, custody and staking providers with institutional clients, and high-margin data and compliance firms.
Mastercard has been linked to a number of other potential takeover targets in the digital assets sector.
Crypto exchange Coinbase and Mastercard are both said to have considered an acquisition of BVNK, a London-based fintech that builds stablecoin payment infrastructure, according to a Fortune report in October.
Zerohash raised $104 million in a Series D-2 round led by Interactive Brokers (IBKR) in October last year, valuing the company at $1 billion.
The raise included new participation from Morgan Stanley (MS), Apollo-managed funds, SoFi (SOFI), Jump Crypto, Northwestern Mutual Future Ventures, FTMO, IMC and Liberty City Ventures, alongside existing backers PEAK6, tastytrade, and Nyca Partners, the company said in a press release at the time.
Founded in 2017, Zerohash offers APIs and embeddable developer tools that allow financial institutions and fintechs to integrate crypto, stablecoin and tokenization services into their products. Its platform underpins offerings for clients including Interactive Brokers, Stripe, BlackRock’s BUIDL fund, Franklin Templeton and DraftKings, reaching more than 5 million users across 190 countries.
Read more: Crypto data platform CoinGecko weighs sale for around $500 million, sources say
(UPDATE 14:09 - adds context in the final paragraph)
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As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Why it matters:
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
