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Stellar and Advent have joined a list of companies including Ant Group and Western Union, to pitch for an acquisition of MoneyGram.
Stellar Foundation, which supports the Stellar Network for blockchain-based payment services, is partnering with private equity firm Advent to purchase MoneyGram (NASDAQ: MGI). A Bloomberg report states that Stellar has already contacted the 81-year-old remittance giant about the potential purchase. According to unnamed sources, neither party has made a final decision, and either one could suspend acquisition efforts.
Founded in 2014, the San-Francisco-based Stellar Development Foundation is a non-profit blockchain-based organization that facilitates cross-border payments between consumers and institutions. In May, Stellar made a $15 million investment in AirTM, a digital wallet and peer-to-peer exchange platform based in Mexico.
On the potential acquisition, Stellar is partnering with Advent, a Boston-based firm with experience investing in the payments space. In the past, Advent has backed companies such as Vantiv and Wordpay.
MoneyGram has attracted the interest of a blockchain payment services firm in the past. In late 2019, blockchain firm Ripple purchased a $50 million stake in the payment giant. However, after selling some of its stake, both companies decided to end their agreement in March 2021. This was after the US Securities and Exchange Commission brought a $1.3 billion lawsuit against Ripple.
MoneyGram is still one of the world’s largest remittance agencies. With a current market cap above $932 million, the company’s stock rose to $11.59 on Wednesday, up 279% in the past year. Furthermore, MGI has climbed over 15% in the last 5 days, more than 65% in three months, and currently has a 110% year-to-date gain.
This is not the first time there is news about a potential MoneyGram purchase. In 2017, Ant Group, a Chinese financial services conglomerate, agreed to buy MoneyGram. The company, however, opted out after some pushback from regulators. According to inside sources, Western Union Co., a rival money-transfer firm, also tried to buy MoneyGram last year.
MoneyGram and Its Foray into Crypto
In keeping with current times, MoneyGram has since expanded into crypto. Through a partnership with Coinme crypto exchange, customers can now buy crypto with cash or make withdrawals from physical locations in the US. The companies intend to expand this offering on a global scale in the second half of this year. Other financial services firms have also made moves into the crypto space, including PayPal, MasterCard, and Visa.
Bitcoin is up over 90% this year, although it’s down about 15% from $64,000 in April. On the other hand, Ether has risen over 170% while Dogecoin has climbed 10,000% this year. Dogecoin, started 2013, is up 4,000% year-to-date. Rival company, Western Union, has not made announcements concerning crypto support yet.
A Stellar takeover of MoneyGram might seem ironic, given its rivalry with Ripple. The two crypto firms have a historic rivalry with Ripple co-founder Jed McCaleb leaving the company in 2013 after clashing with the rest of leadership to start Stellar.