NEW YORK (Reuters) - San Francisco startup Wyre Inc, a cross-border payments firm, has acquired a Beijing-based platform, Chief Executive Michael Dunworth told Reuters on Tuesday, in what he said was the first acquisition by a U.S. company of a Chinese blockchain business in the corporate payments space.
Wyre’s purchase of Remitsy strengthens the U.S. firm’s push into the $500 billion U.S.-China business payments market.
Dunworth declined to discuss terms of the cash and equity deal. Negotiations started in February, he said.
When Remitsy is fully integrated, U.S.-China business payments will be processed in a few hours, Dunworth said in an interview. Currently, payments are completed within three to five business days using other payments processors, he said.
“We’re focused on payments that are fast as email going bank to bank, and to other payments platforms.”
Wyre and Remitsy are primarily focused on business payments between the United States and China. Both companies are enabled by blockchain, a ledger of transactions that first emerged as the software underpinning bitcoin and is maintained by a network of computers.
Blockchain has become the most sought-after technology in the corporate and financial sector, with the world’s largest banks and companies in a mad dash to adopt it.
Remitsy has partnerships with well-known vendors such as Alipay, launched in 2004 by Alibaba Group Holding Ltd (BABA.N) and its founder, Jack Ma. The acquisition allows Wyre to incorporate those partnerships into its own platform and thus bolster its U.S.-China business, Dunworth said.
“It’s the first time any Wyre customer will be able to provide pay-out in China via Alipay,” he said. “Adding Alipay to our platform would be a huge benefit.”
Wyre’s payment volume in March 2016 was $50 million. With the acquisition, transactions processed would increase to $70 million-$75 million over the next few months, Dunworth said. Wyre currently has 1,000 customers.
Remitsy’s co-founders will join the Wyre team and lead the company’s growth and local operations in China.
Wyre raised $5.8 million in capital late last year. The funding round was led by Chinese venture firm Amphora Capital. Other investors include Chinese payments company Baofoo.com and 9fBank.
Draper Associates and Digital Currency Group (DCG) are also investors in the company. Draper Associates was founded by billionaire investor Tim Draper, while DCG was founded by Barry Silbert, one of the first investors to bring bitcoin to the institutional investing market.
Editing by Megan Davies and Matthew Lewis