Coinbase Acquires Utopia Labs Team to Expand Stablecoin Payments in Wallet

2024-11-15 09:58:56 Primitive Reading

From financemagnates by Tareq Sikder

Coinbase is acquiring the team behind Utopia Labs, a stablecoin and payments startup. Utopia Labs shifted focus last year from serving small crypto businesses to concentrating on stablecoin-based payments. This transaction was exclusively reported to Axios.

Utopia Team Joins Coinbase Wallet

Four Utopia Labs team members will join Coinbase: Kaito Cunningham, Alexander Wu, Jason Chong, and Anthony Tat. Their work will center on integrating stablecoin-based payments directly into Coinbase Wallet, with cross-border payments likely to be included.

Utopia raised $23 million from investors, including Paradigm and Coinbase. The company and its product are expected to cease operations after the sale.

Coinbase Eyes More Startup Acquisitions

Coinbase has a history of acquiring startups. Surojit Aggarwal, Coinbase’s Chief Product Officer, noted further opportunities for acquisitions to support Coinbase’s Base network, including teams that enhance developer tools. Coinbase aims to improve user experiences in areas such as payments, creator tools, and social features.

"There's opportunities to acquire different developer tools and teams and integrate them similarly into Base," Aggarwal said. "The user experiences that we're focused on are payments, creators, and social."

Coinbase Reports Soft Market Conditions

Coinbase reported Q3 2024 revenue of $1.2 billion, falling short of Wall Street’s estimate of $1.26 billion. Earnings per share came in at $0.28, missing the expected $0.45, as Finance Magnates reported. EBITDA of $449 million also missed projections by $20.2 million.

These results led to a nearly 5% drop in Coinbase’s share price after hours. The company attributed the slowdown to “softer market conditions,” with a 17% decline in revenue quarter-over-quarter and a 27% drop in transaction revenue. Despite a $121 million loss on its crypto asset portfolio, Coinbase posted a net income of $75 million. Additionally, the company committed $25 million to Fairshake and authorized a $1 billion share buyback program.

In a positive development, Coinbase and Visa launched real-time crypto deposits via Visa debit cards for US and EU customers. This partnership enables eligible Visa cardholders to instantly deposit funds into Coinbase accounts, eliminating delays.

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