Payments Giant PayPal Invests in New Crypto Wallet Software in Push for Web3 Adoption

Payments giant PayPal is investing millions into San Francisco-based crypto wallet company Magic in its latest venture into the digital assets space.

According to Magic’s press release, the wallet-as-a-service (WaaS) provider raised $52 million in a strategic funding round led by PayPal Ventures.

Says Alan Du, a PayPal Ventures partner,“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.”

The funding round also saw investment from Cherubic, Synchrony, KX, Northzone, and Volt Capital, bringing the total amount Magic raised to $80 million, according to the release.

Magic, a 2018 tech startup, provides non-custodial crypto wallet infrastructure for companies that wish to give their customers an easy and secure Web3 experience.

The company uses a unique software development kit (SDK) that is implemented to allow customers to instantly create wallets using their existing email, social media accounts or SMS. To date, Magic has created more than 20 million unique wallets, according to the release.

Magic’s current customers include a number of well-known brand companies including Mattel, Macy’s, Xsolla and Immutable.

Magic’s co-founder Sean Li says the funding will enable the company to expand its presence to the European Union (EU) and Asia-Pacific (APAC) region.

Says Li,“With this new funding, we’re focused on expanding functionality and enabling growing use cases to continue delivering more value to our customers. We are also looking forward to making a deeper integration within the EU and APAC.”

Paypal’s recent filing with the U.S. Securities and Exchange Commission (SEC) shows the company held about $604 million worth of digital assets, including $291 million worth of Bitcoin (BTC) and $250 million worth of Ethereum (ETH), in Q4 2022.

Last December they also announced a partnership with crypto firm ConsenSys to integrate PayPal into MetaMask, one of the most popular crypto wallets in the world.

In April, Venmo, which PayPal owns, announced plans to allow its over 70 million users to transfer crypto to other Venmo users as well as relocate digital assets to external wallets and exchanges.