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MoneyLion to Go Public in a $2.9 Billion Merger with Blank Check SPAC Fusion Acquisition Corporation

Special Purpose Acquisition Companies are “blank check” shell corporations designed to take companies public without going through the traditional IPO process. Fintech analysts have speculated SPACs will target and acquire a large digital financial services platform, suggesting several leading digital banking platforms as potential targets. With today’s announcement, these predictions have come true.

MoneyLion a digital financial services platform, has announced that it will become a publicly-traded company through a merger with Fusion Acquisition Corporation (“Fuse”), a Special Purpose Acquisition Corporation. The combined Company will have an estimated post-transaction equity value of $2.9 billion from the contribution of up to $526 million in cash, net of debt paydown, and expenses.

The transaction includes a $250 million oversubscribed and upsized, fully committed common stock private investment at $10 per share led by funds by Blackrock, Apollo Global Management, and other technology and growth investors. The net proceeds raised from the transaction will be used to support MoneyLion’s working capital and scale its proven platform and suite of products. The deal is expected to close in the first half of 2021, subject to regulatory and stockholder approvals.

“MoneyLion is at the perfect high-growth inflection point that makes accessing public markets a logical next step. This will be the first publicly traded all-in-one digital financial services platform, which in and of itself creates huge scarcity value for the Company,” said John James, Founder, and CEO of Fusion Acquisition Corporation. “Unlike its peers, MoneyLion has purpose-built its technology and operates a holistic platform with multiple products and revenue streams with strong unit economics. We believe in today’s market, there are limited opportunities to invest in high-growth businesses built for profitability like MoneyLion. We look forward to partnering with the Company’s highly experienced team of technologists and financial product experts to accelerate growth post-merger.”

Fusion cited several factors that went into the decision to merge with MoneyLion, most notably, the companies accelerated adjusted revenue growth. MoneyLion generated $76 million of adjusted revenue in 2020 and finished the year with an adjusted revenue run-rate of $102 million in Q4. The company forecasts an adjusted revenue of $144 million in 2021, representing year-over-year growth of approximately 88%. It also expects significant long-term upside from penetrating a sizable potential market and cross-selling products with its platform approach. Other factors include MoneyLion’s mission and purpose, aspirations to serve 100 million customers and reach $250 billion in revenue, data-driven approach to product innovation, and attractive unit economics.

Founded in 2013, MoneyLion offers a range of financial services, including banking, investing, and lending designed to provide its members access to a comprehensive suite of products that help members bank, borrow, build credit, save, invest, and grow – all in one app. The company’s products include Mobile Banking called ‘RoarMoney,’ with no hidden fees and cashback rewards, full-featured, automated Investing tools that enable members to invest in strategies that match their personal preferences, interest-free salary advances with no monthly fees called ‘Instacash,’ a personal financial management tool called ‘Financial Heartbeat’ that offers personalised advice to members and ‘Credit Builder Plus,’ a program designed to help members build or rebuild their credit.

“MoneyLion is a digital financial platform on a mission to rewire a broken banking system that applies a one-size-fits-all approach to personal finance,” says Dee Choubey, CEO and co-founder of MoneyLion. “We are using transformative technology to bring the private banking experience to everyone – in a single app. Our platform surrounds each customer with the financial tools, content, and actionable advice relevant to their unique situation. This model is generating high user growth, multiple product engagement, and low cost of acquisition. A public listing enhances our ability to scale more quickly and continue to innovate so that we can help more people take control of their finances and achieve their life goals.”

Fusion Acquisition Corporation was founded by CEO John James and Chairman Jim Ross. The company was formed “for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganisation or similar business combination with one or more businesses.” Fuse’s stated goal is to target businesses applying, providing, or changing technology within these sectors, seeking companies with an enterprise value of $750 million to $3 billion.

Author

  • Managing Editor, North America at The Fintech Times

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