Crypto wallet provider Zengo has acquired Minke, a stablecoin-focused wallet, in a bid to expand its user base.

The deal discussions began less than a month ago, with the acquisition following swiftly, Zengo co-founder and CEO Ouriel Ohayon told The Block. "Minke was looking for a new home for their users, and it was a good match," Ohayon said.

Minke was seeking a new home for its users because its co-founder and CEO Josh Reyes wanted to concentrate on his other venture, OpenPeer Labs, which is developing a decentralized peer-to-peer exchange, he told The Block. Zengo was a good choice due to its security measures and retail-focused approach, Reyes said.

What is Minke?

Minke was founded in 2021 in Australia and, at its peak, the self-custodial wallet had about 50,000 users, Reyes said. As part of the deal, Zengo aims to onboard Minke's users to its own platform and add to its current user base of over 1 million.

However, as Minke operates as a self-custodial wallet, users have the flexibility to migrate to any other wallet using their seed phrases. Nevertheless, both Ohayon and Reyes are optimistic that the majority of Minke users will opt to transition to Zengo.

While Zengo's primary objective is to expand its existing user base of over 1 million, Minke reached approximately 50,000 users at its peak. Since Minke operates as a self-custodial wallet, users have the option to migrate to any other wallet using their seed phrases. However, Ohayon and Reyes are optimistic that most Minke users will transition to Zengo.

"Most users are using Minke as their first crypto wallet so that they will need migration assistance," Reyes said, adding that they will be "heavily pushed and guided to migrate to Zengo."

Minke will discontinue its wallet and brand as part of the deal. Its Android app is already facing issues. It got delisted by Google due to certain privacy measures Minke implemented for tracking migrations, Reyes said, adding that Minke is addressing the situation. Meanwhile, existing users still have access to the app.

Zengo's first acquisition

Ohayon and Reyes did not disclose the deal terms, but it appears to be a small-sized transaction. Minke had only raised $650,000 in a pre-seed funding round in 2022, Reyes said, adding that investors will receive proceeds from the acquisition.

Minke had a small team of five members, all of whom have shifted to OpenPeer and won't join Zengo, Reyes said.

Zengo was founded in 2018 in Israel and is backed by high-profile investors, including Insight Partners, Austin Rief Ventures and Samsung Next. Last year, the company was looking to raise funds $10 million at a $100 million valuation, as The Block reported at the time. It ended up raising funds but did not disclose the size of the fundraise or valuation.

Minke is Zengo's first acquisition and Ohayon is open for more such deals. He said there are many small players, and to that end, Zengo could raise another funding round within the next 12 to 18 months.

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