Israel’s Fireblocks Acquiring Crypto Payment Platform First Digital for $100 Million
CTech – Fireblocks, which raised $550 million at an $8 billion valuation last month, is acquiring fellow Israeli company First Digital, a stablecoin and digital asset payments technology platform, Calcalist has learned. First Digital was founded in 2017 by CEO Ran Goldi and Yariv Gilat, with its current leadership team also including CTO Daniel Prinz and COO Guy Hadar. The acquisition will expand Fireblocks’ existing payments capabilities by allowing payment service providers (PSPs) and acquirers to accept payments and make payouts in digital currencies. First provides API-based stablecoin payment solutions, with turnkey implementation of transaction and treasury management, and compliance.
First Digital’s 16 employees will all join Fireblocks. The terms of the deal were not disclosed, but it is estimated to be in the region of $100 million. Of the $550 million raised by Fireblocks last month, $100 million went towards secondary deals. Fireblocks currently employs 300 people and serves over 800 financial institutions, securing the transfer of over $2 trillion in digital assets.
First Digital experienced its fair share of highs and lows during its relatively short life. The company raised a total of $20 million to date, including from Target Global, Yariv Gilat, Ofir Shalvi, Sir Ronald Cohen, and Uri Shahak, co-founder of gaming companies Playtika and Beach Bum.
First Digital CEO Ran (Goldi) Goldstein told Calcalist about the rollercoaster ride the company had experienced until reaching this stage. “In 2018 the crypto market was in trouble and experienced a very difficult winter. We had to make adjustments and fired 90% of our staff and restarted our company. We moved to the payments world and became part of a Facebook program and found ourselves working with many large companies like PayU,” explained Goldi. “We believed that crypto would be used for payments and not just trading and I think our gamble paid off as at the end of 2021 we attracted a lot of interest from many payments companies who wanted to add crypto payments to their offering and from crypto companies who wanted to branch out beyond trading.”
Fireblocks CEO Michael Shaulov broke down the reasons behind the acquisition. “We were working with First from the very beginning and have been doing so very closely since they underwent their change. They built one of the strongest teams when it comes to crypto, payments, and product and they will complement our capabilities. First’s significant advantage is that like Fireblocks they built a technological platform that easily connects to the different payment providers and allows them to easily receive payments in cryptocurrencies. Like us, they don’t want to become a financial institution, but rather integrate their technology with our hundreds of clients,” noted Shaulov. “This is our first acquisition and it is significant for us, but we won’t go out and make countless acquisitions now. Our focus at the moment is to integrate First’s team who have capabilities in many sectors. We are looking into other acquisitions, but there is nothing imminent.”
Today, PSPs and large merchants are eager to meet customer demand for crypto and digital asset payments, but offering these services often entails high wallet integration costs, manual KYC/AML screening, and dealing with the complexity of timely acceptance of new blockchain payment types. Fireblocks offers solutions to address these challenges, and the addition of First Digital will further enhance its capabilities. Fireblocks plans to enhance its support for B2C, B2B, cross-border, and other forms of payment via USDC, Celo, and other stablecoins and cryptocurrencies as early as Spring 2022.
The First engineering team brings deep blockchain payments experience and will lead the integration between First’s Payments Platform and the Fireblocks Direct Custody Platform. Fireblocks believes that embedding First into the Fireblocks tech stack will significantly expand its payments offering, creating a suite of tools that integrates digital asset treasury operations with day-to-day financial activities.