Modern banking experiences provider Amount has acquired SMB loan and account origination platform Linear Financial Technologies for $175 million.
Founded last February, Linear offers financial services organizations a set of tools to help create a smooth customer experience. The Virginia-based startup provides a digital originations and servicing platform for credit cards, loans, and deposit accounts to help companies optimize the experience for their customers. Linear’s clients include Citizens Bank, PNC Bank, Fifth Third Bank, Bank of the West, and American Express.
Amount, a three-year-old company based in Illinois, helps financial services companies digitize their infrastructure to keep up with the rapid pace of technological change. The company’s modular approach offers firms their choice of embedded finance tools, including omni-channel account opening, credit cards, loans deposits, buy now pay later (BNPL), and more.
“In Linear, we saw an opportunity to pair Amount’s consumer banking solution and buy now, pay later technology with Linear’s small business banking solutions to help financial institutions simplify and streamline business processes to create new business opportunities and increase value for our clients,” said Amount CEO Adam Hughes. “We admire what Sam and his team have built at Linear, especially as we share many of the same values when it comes to developing technology, with a heavy focus on bringing data and insights to the forefront, to improve customer experiences, business processes, and risk management. I’m excited to welcome the Linear team to Amount and look forward to working beside them to expand Amount’s product set.”
After the deal is finalized, Linear will rebrand and operate as Amount Small Business. Linear CEO Sam Graziano will join Amount’s executive team and become Head of Amount Small Business. Combining the two companies will boost Amount’s employees to almost 600. The firm will maintain offices in New York City, New York; Reston, Virginia; Chicago, Illinois; and Los Angeles, California.
Today’s announcement comes four months after Amount partnered with Marqeta to help banks enter the BNPL space. The company, whose bank clients collectively manage just over $3.1 trillion in assets and serve more than 50 million U.S. customers, was valued at over $1 billion after a $100 million Series D funding round last May.
The BNPL space flooded with new players last year. This influx of new companies, plus the pressure from incumbent financial services firms such as Goldman Sachs offering BNPL solutions, has made competition in the credit card alternative space hotter than ever. Today’s merger will offer Amount a better competitive advantage against established BNPL players such as Klarna, AfterPay, Affirm, and Sezzle. As the BNPL market begins to mature, we can expect to see much more merger and acquisition activity in 2022.