Mergers & Acquisitions

Urban FT Acquires iParse

By Julie Muhn (@julieschicktanz) Posted on

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B2B digital banking platform Urban FT acquired Oregon-based iParse today. Urban FT plans to leverage iParse’s technology and its mobile banking-related patents.

Terms of the deal were not disclosed. Operations will continue as usual for iParse, which will function as a separate division from Urban FT. All staff (except for the founders, who are retiring) will continue as employees of Urban FT’s new unit. The company’s CEO, Richard Steggall, is calling the new deployment a “mobile banking plug-in solution” because it empowers financial institutions of any size to compete in the mobile banking space by plugging directly into their core, simulating integration. Urban FT estimates the mobile plug-in option will be available to clients within the next couple of months.

In the press release, Steggall said:

“The iParse tech strategically complements Urban FT’s suite of white-label mobile banking solutions by providing a proprietary way to bypass core processor integration, while delivering a robust mobile banking service for financial institutions to offer to their customers…. now credit unions and banks of any size can play—and play competitively—in the mobile banking space.”

Founded in 2013, Urban FT expects the number of bank clients it serves to double to more than 150 within the next year. Kasey Kaplan, Urban FT President said, “On the bank side, we size the market at approximately 12,500 potential targets, and we know that almost 42 percent of credit unions have yet to launch any form of mobile banking.”

At FinovateFall 2016, Urban FT debuted the Workshop, a real-time mobile app management platform that enables banks to quickly configure, brand, and launch mobile banking apps without coding. The company has 40 employees and, in addition to financial institutions, also serves clients in telecommunications, insurance, and travel. Among the New York-based company’s partners are Sprint, Boost Mobile, Yelp, Banc of California, and Sunrise Banks.

Nostrum Group Acquired by Equiniti Group

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Just a few days after Vantiv and Worldpay made merger and acquisitions headlines in the payments world, here come Equiniti and Nostrum Group with some M&A news of their own in the lending space. Announced today, Equiniti has agreed to acquire Nostrum Group in a deal that will boost Equiniti’s ability to provide technology-enabled lending solutions. Equiniti CEO Guy Wakeley said “The integration of Nostrum will provide greater depth, scale and capability in a dynamic growth market, whilst also providing the platform for a range of new products and services.”

Calling the acquisition “the next chapter in the development of our businesses,” Nostrum Group CEO Richard Carter described the combined entity as a blend of “Equiniti’s rich feature set and Nostrum’s agility.” Carter will stay on as Managing Director of the newly-formed Equiniti Credit Services brand.

Pictured: Nostrum Group CEO Richard Carter demonstrating the company’s Digital Lending Platform at FinovateEurope 2016.

Nostrum Group specializes in automated digital loan management software for banks and finance companies. The company’s technology provides solutions for every step of the process from originations (including application capture, processing, documentation, underwriting, and completion), servicing (including payment processing, document management, and reporting), and collections (including profiling and segmentation; payment and arrangements; work prioritization and automation; and third party management). More than focusing on acquiring new customers, Nostrum Group also offers tools lenders can use to retain their existing customers, as well. As Carter explained from the Finovate stage last year, Nostrum Group offers lenders the technology “to facilitate the production of appropriate offers that are tailored to those customers and then delivered to them.”

Headquartered in Harrogate, North Yorkshire, U.K. and founded in 2001, Nostrum Gr0up demonstrated its Digital Lending Platform at FinovateEurope 2016. Later that year, the company’s CTO Alex Stephen, Head of PMO Tom Martin, and Head of Software Development Simon Quin presented the “Nostrum Loan Engine API” at our developer’s conference in New York. This year, CEO Carter was named to the Maserati 100, a roster of top British entrepreneurs from high-end carmaker, Maserati, and The Sunday Times.

Technology services provider Equiniti was founded in 2009. Many of the largest pension schemes in the U.K., and 70% of the FTSE 100, use Equiniti services to manage share registration and related investors services. The company is listed on the London Stock Exchange under the symbol, “EQN,” and has a market capitalization of £750 million ($972 million).

 

Fiserv to Acquire Monitise for $89 Million

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Financial services company Fiserv has agreed to acquire U.K.-based Monitise for 2.9 pence per share, which equates to $89 million.

The acquisition comes after a storied history for Monitise, which was valued at $2.6 billion at its peak in 2014 and had formed successful partnerships with IBM, Santander, Telefonica, Virgin Money, and others. In 2015, however, the company changed its business model because of increased competition from tech giants such as Alphabet and Apple who offered mobile payment services for free. After the pivot, Monitise wasn’t able to recover and ended up putting itself up for sale in 2015.

Founded in 2003, Monitise demoed its mobile banking platform on a Nokia flip phone at FinovateFall 2007, the same year it went public on the London stock exchange. In 2009, Monitise’s mobile payments partner, Metavante, was acquired by Fiserv rival FIS. Most recently, Monitise launched FINkit, a cloud-based platform, in 2016 to foster collaboration between banks and fintechs. BehavioSec, Currencycloud, and Envestnet | Yodlee were among the founding FINkit members.

Fiserv anticipates the acquisition, which is subject to shareholder approval, to “accelerate the Fiserv digital strategy and the development of a next-generation digital banking platform for leading financial institutions worldwide.” The Wisconsin-based company will foster Monitise’s FINkit program to help its bank clients accelerate adoption of fintech services.

Jeffery Yabuki, Fiserv President and CEO said, “Monitise has been a global pioneer and innovator in digital banking for more than a decade.” He added, “Combining its talented associates and advanced technologies with leading digital solutions from Fiserv will expand our clients’ ability to provide differentiated experiences to their customers.”

Founded in 1984, Fiserv most recently presented at FinDEVr New York 2017, where the company’s Sr. Product Manager, Jon Zimmermann, and VP of Electronic Payments, Paul Diegelman, addressed the audience in a presentation titled Payments Processing: Bank-Grade Standards, Now Available to Anyone. Yesterday, the company announced that it will help banks and credit unions join the Zelle P2P payment network via its Turnkey Service for Zelle.

Algomi Acquires AllianceBernstein’s ALFA’s Fixed Income Liquidity and Analytics Tool

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In a deal announced this week, Algomi, a company that offers tools for buy-side and sell-side trading in fixed income securities, has acquired ALFA (Automated Liquidity Filtering & Analytics) from AllianceBernstein. The acquisition includes the IP and technology behind ALFA as well as the brand name. As a part of the acquisition, AllianceBernstein is taking an undisclosed, minority stake in Algomi, as well as a seat on the company’s Board.

Originally developed as an in-house liquidity tool, ALFA is now called Algomi ALFA. The solution provides cross-market information on liquidity and trading to give the buy-side a real-time view of the entire bond market. Algomi, which AllianceBernstein selected via a competitive process to take over ALFA, will become the sole marketer of Algomi ALFA, which will be sold to buy-side fund managers.

At FinovateFall 2014, Algomi debuted Honeycomb, a buy-side GUI that helps investors see which dealer is best to facilitate illiquid block trades without disturbing the market. Founded in 2012, Algomi has 140 employees with offices in London, New York, and Hong Kong. Earlier this year, the company received a $10 million investment from Euronext, boosting its funding to more than $10 million after Thomson Reuters CEO Tom Glocer invested an undisclosed amount of capital in a 2016 round.

KPMG Acquires Fintech Collaboration Specialist, Matchi

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Fintech matchmaker Matchi has made a major match of its own: The Hong Kong-based company agreed to an acquisition by KPMG this week. Terms of the deal were not immediately available.

Calling the combination of the two entities a “powerful fintech resource,” Matchi CEO David Milligan said that the acquisition will help Match “fulfill the promise of collaboration between financial institutions and fintech firms, which can ultimately benefit all consumers.” Global co-leader of Fintech for KPMG International, Ian Pollari called Matchi’s curated approach” as very different from the “fintech databases that merely provide lists.” He added “It is designed to identify, match, and enable collaboration with the most innovative fintechs and solutions to address specific issues being faced by financial institutions.”

Matchi’s platform featured more than 700 curated fintech solutions as well as a 2,500+ company database of fintech innovators that FIs can collaborate and work with. FIs can search for specific companies or technologies, and take advantage of Matchi’s Innovation Challenge feature by issuing a specific business issue or problem on the platform and see what fintechs are interested in pursuing a solution. “Finding fintech companies who are pre-validated, helps to reduce risks and can accelerate time to market,” Pollari explained.

Founded in 2013, Matchi demonstrated its technology at FinovateFall 2014. The company has played matchmaker for more than 100 leading banks and insurance companies worldwide, helping firms deploy a variety of technologies ranging from next generation payments to the blockchain. Last month, Matchi teamed up with ATB Financial and KPMG Canada to run a customer onboarding innovation challenge for fintech companies.

 

Thoma Bravo to Acquire Lexmark’s Kofax

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Customer engagement and analytics company Kofax is undergoing its second acquisition in as many years this week. The company announced it will be acquired by private equity firm, Thoma Bravo.

The acquisition includes all of Lexmark’s Enterprise Software business, which is made up of three entities; Kofax, ReadSoft and Perceptive Software. Terms of the deal, which is expected to close Q3 of 2017, were not disclosed. Once the deal is finalized, Kofax and ReadSoft will be combined into a single, newly independent Thoma Bravo portfolio company. The new entity will operate under the Kofax brand and will be led by President of Lexmark Enterprise Software, Reynolds Bish.

Regarding the acquisition, Seth Boro, Managing Partner at Thoma Bravo said that he is “thrilled to partner with Reynolds and his management team under the Kofax brand as a new Thoma Bravo portfolio company.” Boro siad that Kofax’s “vision to digitally transform and simplify initial customer interactions with businesses, or what they term the First Mile” offers an opportunity for Thoma Bravo.

Kofax was recently named by Forrester as a leader in ECM Transactional Content Services. Last month, the company announced the availability of ReadSoft Online R9, an automated accounts payable solution. And in March, a top 10 global bank deployed Kofax Mobile Credit and Debit Card Framework and the Kofax Mobile Capture Platform.

Loyal3 Shuts Down, Stockpile Steps Up

By Julie Muhn (@julieschicktanz) Posted on

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As Tupac once said, “I don’t have no fear of death. My only fear is coming back reincarnated.” Unlike Tupac, however, Loyal3 users have nothing to be scared of. That’s because even though Loyal3 is shutting down its IPO marketplace and discount brokerage platform on May 19, stock gift card company Stockpile has stepped in to allow Loyal3 clients to transfer their shares to its platform.

Launched in 2008, Loyal3 sought to democratize capital markets by helping novice investors purchase fractional stock shares. Users could browse the company’s portfolio of 70 stocks and invest with as little as $10 per stock, with zero fees. The company’s batch trading strategy executed trades once per day. At FinovateFall 2014, the company showed off its mobile IPO marketplace where users could view the IPO status, receive IPO pricing and allocation notifications, and confirm or withdraw their IPO reservations.

To capture Loyal3 clients, Palo Alto-based Stockpile has facilitated the onboarding process for the new customers. Users just sign up for a Stockpile account, email a recent Loyal3 account statement to Stockpile’s customer support, and Stockpile returns a (mostly) pre-filled account form. Users complete, sign, and upload the form to Stockpile, which oversees the transition of assets over to its platform. The only wrinkle is that Stockpile cannot accept stocks from Frontier and Nokia; users will need to cash out those stocks.

This isn’t Stockpile’s first move to expand its user base. In 2016, the company acquired SparkGift, transferring SparkGift’s customer base to its own brokerage platform for free. In 2015 the company partnered with Blackhawk Network to offer physical gift cards in denominations of $25, $50, and $100 at select U.S. retailers. Founded in 2010, by Avi Lele and Sanj Kulkarni, Stockpile launched at FinovateSpring 2014 in a demo that won Best of Show.

OutsideIQ Acquired by Global Compliance Specialist, Exiger

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The recent news that due diligence innovator OutsideIQ agreed to be acquired by compliance specialist, Exiger, is a sign that the RegTech revolution in fintech is real. OutsideIQ founder and CEO Dan Adamson said the acquisition was a “logical step in our shared view of the dominant role that cognitive computing solutions will play in compliance.” Business Insider reports that Exiger paid $22 million (C$30 million) for the Toronto, Ontario, Canada-based company.

OutsideIQ’s flagship technology DDIQ leverages automation and human analysis to detect potential regulatory risks that often go overlooked by currently-used methods. Geared toward financial institutions, investment firms, and large enterprises, the technology automatically scans publicly available information for any data on the subject and provides auditable reports on the findings. Exiger Analytics president Brandon Daniels noted that transaction alert monitoring, KYC/AML, onboarding, and counterparty/ third party risk at the enterprise level are among the challenges DDIQ will help Exiger address. “The acquisition … will augment our ability to deliver purpose-built, AI-based solutions that transform how global banks and multi-national corporations meet the evolving expectations of regulators looking for truly measurable and auditable solutions,” Daniels said.

Founded in 2010 and headquartered in Toronto, Ontario, Canada, OutsideIQ demonstrated its due diligence technology, DDIQ, at FinovateSpring 2016. In March, the company partnered with SAP Ariba, and teamed up with Genpact to provide better KYC and compliance solutions for FIs. We highlighted OutsideIQ last fall in our RegTech Reality Check. OutsideIQ is also a veteran of our developers conference, having presented at FinDEVr Silicon Valley 2016.

OutsideIQ is Exiger’s largest acquisition to date. Exiger was founded in 2013 to provide court-mandated oversight of HSBC, “the most comprehensive monitoring assignment ever awarded by the Department of Justice” according to the company. Additionally, Exiger serves clients worldwide through its offices in New York, Toronto, London, Hong Kong, Singapore, and Silver Spring, Maryland.

Cartera Commerce Acquired by Ebates

By Julie Muhn (@julieschicktanz) Posted on

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Card-linked offers (CLO) solutions company Cartera Commerce announced this week it has been acquired by loyalty marketplace, Ebates. San Francisco-based Ebates anticipates the acquisition will bolster its loyalty marketing offerings and will offer new loyalty programs to its existing clients.

This announcement further demonstrates consolidation in the CLO/rewards space that peaked in 2012. Last month, CLO company edo Interactive was acquired by Auego.

Massachusetts-based Cartera Commerce partners with companies who use loyalty programs to reward their customer base. The company works with 5 of the top 10 U.S. credit card issuers and 5 of the 6 largest U.S. airlines. Since it was founded in 2005, Cartera has distributed 20+ billion points and miles. At FinovateFall 2011, the company debuted its Local Offers solution which aimed to help banks compete with daily deals sites.

In the press release announcing the acquisition, Cartera Commerce CEO Tom Beecher said, “We are excited to leverage Ebates’ expertise and solutions to enhance the loyalty marketing services we provide to our clients – and to work together on new and exciting offerings for our customers.” Beecher will remain CEO of Cartera Commerce, which will continue operations in its Massachusetts office.

Ebates launched in 1999 and was acquired by Rakuten in 2014. The company has distributed almost $1 billion in rewards to its user base of 20 million shoppers.

Wipro Agrees to Acquire InfoSERVER for $8.7 Million

By Julie Muhn (@julieschicktanz) Posted on

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Information technology company Wipro announced today it has agreed to acquire Brazil-based InfoSERVER for $8.7 million. In the press release, India-based Wipro noted that it sees Brazil as a strategic “growth and investment region.”

Today’s deal marks the company’s 11th acquisition. Wipro expects that IT services provider InfoSERVER will help it “[expand] its presence in the country’s highly traditional and competitive banking, financial services and insurance market” as well as add “invaluable domain and process knowledge on the sector.” Wipro’s presence in Latin America already spans Argentina, Brazil, Chile, Colombia, and Mexico. The company is hoping today’s partnership will help it expand in the LATAM market. InfoSERVER has been working with Brazilian banks for 20 years and counts some of the largest banks in Brazil as its clients.

InfoSERVER’s VP and head of sales, Fabiano Funari, said that he is excited about the deal. Funari anticipates that Wipro’s “global client base, delivery expertise and scale” will help the company expand its global reach as well as the breadth of its offerings.

Founded in 1945, Wipro went public in 2000. Wipro demoed at FinovateEurope 2015 where it debuted ngGenie MyAdvisor. MyAdvisor is a natural language chatbot that uses machine learning to learn consumers’ spending patterns and transactions to provide personalized assistance. Most recently the company was positioned as a “Leader” in Gartner’s Magic Quadrant for application testing services.