Through successful mergers and acquisitions (M&As) companies can accelerate growth, boost revenue, improve cash flow and integrate new employees and new ways of doing business. Here we round up some of the notable fintech industry M&As of 2020 – from January to December.
Payments giant Visa revealed its intention to acquire open banking platform Plaid for $5.3billion in cash. However, 11 months later and the US Department of Justice filed a civil antitrust lawsuit to stop the deal.
It said Plaid’s established connections and technology uniquely positions it to enter the payments market and disrupt Visa’s monopoly.
Visa hit back with the argument that the DOJ’s objection was ‘legally flawed and contradicted by the facts’. The debate will continue into 2021…
On to February, and Intuit outlined plans to acquire Credit Karma. The deal, valued at $8.1billion, eventually completed in December. Credit Karma sold its tax-prep product to Square in November in order for the acquisition to get the nod from the US Department of Justice.
Also this month, Southeast Asian app Grab announced it had acquired Singapore-based wealth tech start-up Bento. Later, Bento was rebranded as GrabInvest, while new products were launched in South-East Asia.
Payments provider Fiserv snapped up enterprise point-of-sale systems specialist Bypass Mobile. The acquisition built on an existing relationship that saw their combined technology in more than 50 major stadiums and arenas. In December, Fiserv also acquired digital card services platform Ondot.
We also saw a merger between Aon and Willis Towers Watson, creating one of the largest HR consulting firm and insurance brokers.
Meanwhile, Spanish authorities approved SIX Group’s purchase of Bolsas y Mercados Españoles for €2.8billion. But it took until June for the deal to be completed. Following the acquisition, SIX and BME became the third largest financial market infrastructure group in Europe and 10th largest worldwide.
In April, personal finance firm SoFi signalled its intent to buy payments provider Galileo Financial Technologies for $1.2billion. Also that month, SoFi added another acquisition to its tally in a deal with trading app 8 Securities in Hong Kong.
Singapore-based fintech startup GoBear moved into consumer lending with the acquisition of fintech AsiaKredit in May. GoBear said it would use the platform to provide its 100 banking and insurance partners with a lending-as-a-service facility for underserved consumers in South East Asia and Hong Kong.
Cryptocurrency-trading service Square scooped up Verse, the Spain-based peer-to-peer (P2P) payments app. Verse’s team joined the Cash App division within Square. Square said the plan was for Verse to operate as an independent business, with no immediate changes to their existing products, customers or branding.
Mastercard revealed it would buy Finicity, a provider of real-time access to financial insights, in a deal valued at $825million. Finicity’s apps include the Quicken Loans Rocket Mortgages and Experian Boost platforms which use data to help improve credit scores.
Meanwhile, Credit Sesame acquired Canadian challenger bank STACK. The deal followed their prior collaboration to develop the Sesame Cash banking service. As well as combining their technology, all STACK employees were ‘seamlessly integrated’ into Credit Sesame.
On to July, and global online investment platform eToro acquired e-money platform Marq Millions ahead of the launch of a new debit card. Following the acquisition, Marq Millions is now trading as eToro Money.
This month, American Express agreed to buy all of fintech Kabbage. Under the terms of the agreement, American Express would acquire Kabbage’s team, as well as its products, data platform and IP built for small businesses.
Fintech Ohpen acquires loan and mortgage software company Davinci. The Dutch cloud-based banking system said the deal would lead it to offer a full suite of products across savings, investments, loans, mortgages and current accounts.
Will they or won’t they? Russian tech giant Yandex agreed a $5.5billion deal to buy Tinkoff, the country’s top online bank. At the time, it was suggested the cash and share deal would be worth about $5.48billion. Yet, one month later and the mega deal was off! Reports suggest the merger was cancelled after Tinkoff’s billionaire founder Oleg Tinkov walked away from negotiations.
In a more straightforward deal, Stripe revealed plans to acquire Paystack in order to accelerate online commerce across Africa. More than 60,000 businesses in Nigeria and Ghana use Paystack to securely collect online and offline payments. The pair said the acquisition is the culmination of a close partnership between Stripe and Paystack over the last several years.
Italy’s Nexi agreed a €7.8 billion all-share merger with Nordic rival Nets. The pair said the deal would create a leading pan-European paytech player offering ‘future-proof innovative payment solutions’.
Also this month, Nordic Capital signed an agreement with management and technology consulting firm BearingPoint to acquire BearingPoint Regtech.
Then, Mogo expanded into the global B2B fintech market with acquisition of digital payments firm Carta Worldwide. Carta is currently operating in Europe, Asia and Canada and recently expanded into the US market.
Finally, Wahed, the US-based Islamic finance fintech backed by Saudi Aramco, acquires upcoming UK digital banking app Niyah. The move is part of Wahed’s ambition to become the leading ‘one-stop-shop’ for Shariah-compliant financial services. Once Niyah has launched in the UK, Wahed also plans to target North America, Asia, Europe and the Middle East.
Throughout the second half of this year, we saw the sell-off of the disgraced German payments fintech Wirecard. US-based holding company Syncapay snapped up its North America business. Bulgaria’s Paynetics acquired the corporate pay-out card portfolio of Wirecard UK and Ireland. While Railsbank purchased the assets and technology of Wirecard Card Solution.
In addition, Santander has agreed to buy specialised technology assets from the company. Change Financial also agreed to buy Wirecard’s assets in Australia and New Zealand, while identity firm IDnow picked up the firm’s communication services unit. Meanwhile, Portuguese payments processor Sibs acquired Wirecard’s operations in Romania.