Daily news

BNPL Consolidates: Zip to Buy Sezzle

BNPL Consolidates: Zip to Buy Sezzle
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, Sezzle
  • Consolidation in the Buy now, pay later (BNPL) industry continues as Zip agrees to acquire competitor Sezzle.
  • The deal values Sezzle at $355 million.
  • After the acquisition is finalized, Sezzle will rebrand to Zip and the company’s CEO Charlie Youakim will lead Zip’s U.S. business.

Buy now, pay later (BNPL) player Zip (formerly known as Quadpay) is acquiring Sezzle in a deal that values Sezzle at $355 million.

Zip CEO and co-founder Larry Diamond expects the deal will help Zip scale up its operations. “Combining with Sezzle positions us as a leading global BNPL provider and prioritizes our ability to win in the important U.S. market.”

Following the deal, Zip’s customer base will increase from 9.9 million to 13.3 million and the number of merchant partners will grow from 82,000 to 129,000. Additionally, The Financial Review estimates that Zip’s total transaction volume will rise from $8 billion to $10.4 billion, and that almost $6.5 billion of this will be from U.S. users.

After the deal closes, Sezzle will rebrand as Zip and the company’s CEO Charlie Youakim will lead Zip’s U.S. business. “I believe the transaction will position us to win in the U.S. and globally,” Youakim said.

Today’s announcement is yet another indication of consolidation in the increasingly-crowded BNPL space. Industry giant Afterpay sold to Block (formerly Square) on February 2nd. And on February 17th, digital payments firm Latitude agreed to acquire Humm’s BNPL operations.

Australia-based Zip was founded in 2013, seven years before BNPL took off as an alternative payment method. Zip is publicly traded on the Australian Stock Exchange (ASK) under the ticker ZIP. The company allows users to split their purchase into four installments over the course of six weeks. With Zip’s app, shoppers use their Zip Virtual Card to pay for their purchase in installments anywhere that Visa is accepted, both online and in-store.

Similarly, Sezzle allows shoppers to use their Sezzle Virtual Card to pay for purchases in four installments over the course of six weeks. The company also offers a long-term financing tool in partnership with Ally and Sezzle Up, an alternative credit solution that helps shoppers build their credit.

Minnesota-based Sezzle was founded in 2016 and went public on the ASK in 2019 under the ticker SZL. At the time, Sezzle said it opted to list on the ASX instead of in U.S. markets because, prior to 2020, the BNPL model was more commonplace in Australia, given that Afterpay, a major player in the BNPL arena, is headquartered in Melbourne.

Photo by Jessica Lewis on Unsplash

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TransUnion’s New Tools Protect Lenders While Helping Users Improve their Credit Scores

TransUnion’s New Tools Protect Lenders While Helping Users Improve their Credit Scores
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, TransUnion
  • TransUnion launched Point-of-Sale Suite of Capabilities to provide lenders insight into consumer borrowing habits with point of sale lending and buy now, pay later products.
  • The new data reporting helps lenders underwrite credit risk.
  • The reporting methods also benefit the consumer by not penalizing them for using these alternative credit products on a regular basis.

Financial insights firm TransUnion launched a new set of tools today that will help shoppers using point-of-sale (POS) loans, including buy now, pay later (BNPL), improve their credit scores while offering lenders a more holistic view of prospective borrowers’ risk.

TransUnion’s Point-of-Sale Suite of Capabilities offers lenders insight into the payment behaviors of consumers using alternative credit tools such as POS lending and BNPL products.

This increased data reporting and visibility helps lenders underwrite credit risk, but also benefits the consumer by not penalizing them for using these alternative credit products on a regular basis. That’s because POS and BNPL loans are underwritten as unsecured installment loans. When these installment products are used frequently, typical credit models could view the borrowing behavior as risky.

“The inclusion of point-of-sale loans including BNPL into credit reports and other risk management tools can help tens of millions of consumers gain access to more credit opportunities and potentially secure better loan terms,” said Liz Pagel, senior vice president and consumer lending business leader at TransUnion. “TransUnion has taken a measured approach in developing our solution suite, working with the top BNPL lenders over the past three years to craft solutions that benefit consumers and do not penalize them for using these products frequently.”

TransUnion’s new toolset aims to offer lenders a single standard to report this alternative borrowing data. In order to minimize unnecessarily negative impact on the consumer credit score while still communicating valuable borrowing and repayment data, POS and BNPL borrowing information will be tagged and filtered into a new section in TransUnion’s core credit file.

“Maximizing the financial inclusion impact requires broad usage of this valuable data in more credit decisions. Ultimately, given the prominence of FICO and VantageScore in the market, the biggest impact from the data will not be realized until the data migrates to the core file and these scores take into account consumers’ good behavior,” added Pagel.

The use of BNPL is becoming more commonplace as more retailers and payment companies adopt varying versions of the technology to encourage higher consumer spending. In fact, according to a recent TransUnion study, up to 100 million U.S. adults have used BNPL loans at least once in the past 12 months. As this growth continues, lenders will need to adjust their underwriting models to account for use of alternative lending technologies.

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Signal Intent Rebrands as Chimney and Secures Seed Investment

Signal Intent Rebrands as Chimney and Secures Seed Investment
By David Penn Posted on
Categories: Alumni News, Chimney, Daily news, Signal Intent
  • New York-based Signal Intent has rebranded as Chimney.
  • The company won Best of Show in its Finovate debut at FinovateSpring last year.
  • The rebrand announcement accompanied news that Chimney had raised seed funding that “exceeded its investment goals.”

Signal Intent, which won Best of Show in its Finovate debut at FinovateSpring 2021, has rebranded as Chimney. The company develops financial calculators for banks, credit unions, insurers, and mortgage companies that are “built for the digital age.” The New York-based fintech’s rebrand, announced last month, was accompanied by a seed investing round with participation from individual investor Anil Aggarwal, as well as investment firms Fin VC, and Converge.

“Banking is fundamentally changing as consumer behaviors shift,” Chimney CEO Matthew Covi said. “To compete, banks must change their digital strategy. It is no longer about providing outstanding products and services. It’s about the value they provide through digital experiences. As consumers increasingly make financial decisions online, they expect experiences that are embedded in their everyday life. Chimney is committed to delivering not just the products consumers want, but the experiences they expect.”

More than 60 financial institutions in 30 states use Chimney’s financial tools and technology to better engage their customers and fund more loans. The company said that its financial institution clients have experienced a 15% boost in conversions since deploying Chimney’s technology that helps connect customers to the right solution at the right time. Chimney also helps FIs reduce acquisition costs while growing their loan portfolios.

Selected for the 2022 ICBA ThinkTECH Accelerator program, Chimney plans to add to its team, including multiple “key positions” over the next several months. The company’s co-founders include Chief Technology Officer Ryan F. Salerno, former Technical Co-founder of equity management platform Finta (previously Equity Token); and Chief Revenue Officer Chase Neinken, former VP of Global Sales at B2B media company Industry Dive.

“We created Chimney to build the future of financial guidance,” Neinken said. “We believe in a world where people are empowered to make better financial decisions through technology – it’s about confidence and understanding. The demand so far has exceeded expectations and we’re thankful to our clients, partners and investors. Big things are coming ahead.”

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Neobank Nerve Launches Embedded Banking Product

Neobank Nerve Launches Embedded Banking Product
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Challenger bank Nerve is launching banking-as-a-service APIs.
  • The APIs will enable creator platforms to offer their clients in the creator economy an embedded digital banking experience.
  • Nerve’s flagship digital bank for musicians helps artists treat their music like a business by providing digital banking and tracking tools.

Nerve, a challenger bank originally designed for musicians, is getting a bit more creative this month. The startup launched a set of public APIs that will help companies serve their clients in the creator economy.

According to Nerve Co-founder John Waupsh, content creators–whether they are individuals or small businesses– have long been underbanked and overcharged. “Every creator deserves financial dignity, and we believe that this begins with a business checking account, and collaboration tools that meet their everyday needs. They are businesses and should be afforded those same benefits,” said Waupsh.

Nerve’s new APIs will offer firms a way to send payouts and royalties at a lower cost to artists such as musicians, authors, entertainers, filmmakers, makers, podcasters, social media content creators, songwriters, and more. The APIs will also enable companies to provide their creator clients with free digital banking tools to help manage their business.

“Companies that pay creators deserve the best, fastest, and least expensive way to pay those they serve, and our APIs open up win-win options for all in the ecosystem,” said Waupsh. “Companies providing distribution, licensing, advances, credit, marketplace, or other services are now able to use Nerve’s APIs to deliver instant, lower-cost payouts to creators.”

Nerve’s flagship product, launched last September, is a niche bank account that helps musicians treat their music like a business. Artists can use the free FDIC-insured debit and savings accounts, powered by Piermont Bank, to manage their business expenses and track and receive royalties and payouts. In addition to digital banking, Nerve also offers tools to help artists collaborate with fellow artists in the music industry, as well as view and track their own stats for Spotify, YouTube, and a range of social media platforms.

Creator platforms that use Nerve’s banking-as-a-service tool will have the opportunity to have access to creators’ transaction and balance information. This data, in turn will benefit the platform by helping them create specialized banking products, such as loans and invoicing tools, to up-sell and better serve their customers.

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Identity Verification Specialist OCR Labs Secures $30 Million in Series B Funding

Identity Verification Specialist OCR Labs Secures $30 Million in Series B Funding
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, OCR Labs
  • OCR Labs, an identity verification company founded in Australia and headquartered in London, announced a $30 million Series B round.
  • The funding takes the company’s total capital to $46 million and will be used to help OCR Labs expand further in North America and EMEA.
  • Making its Finovate debut in 2016, the company won Best of Show at FinovateAsia a year later.

In a round led by Equable Capital, a New York-based family office, identity verification specialist OCR Labs has raised $30 million in a Series B round. The investment will be used to help the London, U.K.-based company grow its team in North America and EMEA, and gives the firm $46 million in total capital.

“2021 was an incredible year for OCR Labs, with continued validation from customers who have chosen us as their provider for online digital identity verification,” OCR Labs CEO John Myers said in a statement. “This investment provides us with the capital to continue our growth while bringing a value-added investor on to our board.”

Boasting a 5x increase in new clients and 3x growth in the size of its team over the past 12 months, OCR Labs offers automated identity verification via ID document validation, facial biometrics and other techniques. OCR Labs’ approach removes the need for human intervention in the customer identification process, and gives companies the tools they need to meet AML and KYC requirements and reduce fraud.

The company made its Finovate debut at our developers conference FinDEVr Silicon Valley in 2016 and returned one year later to win Best of Show at FinovateAsia in Hong Kong. Securing Series A funding last year, OCR Labs also recently opened a new office in North America, added a direct sales force, and hired a global Chief Revenue Officer.

“Our vision remains unchanged,” Myers said, “we strive to be the leading technology provider of digital identity verification, globally. The market opportunity continues to grow, and with our expansion in the U.S., and investment in our global sales effort, we’re in a phenomenal position to grow our customer base.”

The first private company to earn accreditation as an identity provider under the Trusted Digital Identity Framework (TDIF) of the Australian government, OCR Labs serves customers in a wide variety of verticals including financial services companies, brokerages, insurers, telecoms, and gaming companies.

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Virgin Money Partners with HooYu to Boost Success of Customer Onboarding Process

Virgin Money Partners with HooYu to Boost Success of Customer Onboarding Process
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, HooYu

If making a great first impression is important, then Virgin Money’s decision to partner with customer onboarding and KYC technology specialist HooYu should make a pretty good impression of its own.

“Our smart digital tools put our customers in control and the HooYu journey helps our customers to successfully pass KYC where traditional name and address checks fail,” Virgin Money Head of Digital Customer Experience Linda Robertson said. “We chose to work with a regtech partner like HooYu because their platform enables us to easily build a range of digital onboarding journeys that are simple for our new customers to complete.”

A two-time FinovateEurope alum, HooYu combines a variety of KYC tools and technologies to ensure the success of the customer onboarding journey. This includes giving companies confidence that their customers are who they say they are. HooYu’s identity verification service leverages selfie capture, liveness detection, ID document capture and validation, facial biometrics, address proofing, and geolocation in a seamless process that reduces abandonment and increases conversions. Features such as dynamic customer prompts, white label customization, and flexible customer journeys help reduce friction and streamline the account opening experience.

Calling the emphasis on the digital customer experience an “obsession” with banks like Virgin Money,” HooYu Marketing Director David Pope said it was HooYu’s role to help these institutions “refine their new account journeys and achieve the origination goals.”

Virgin Money serves 6.5 million customers in the U.K. A full-service digital bank, the institution offers current, savings, and business accounts; credit cards and insurance; mortgages and personal loans; as well as pensions and investments. Originally launched as Virgin Direct in 1995, the company secured its banking license 2010 and rebranded as Virgin Money two years later.

“It’s our job to help banks like Virgin Money to orchestrate KYC services and easily configure and deploy with a great customer journey,” Pope said.

Founded in 2015 and headquartered in London, U.K., HooYu began the year by leveraging open banking to support identity and affordability checks. The new offering, Bank Connect, enables users to establish their identity or affordability by logging into their bank account during the KYC process. With the user’s consent, Bank Connect provides identity, account overview, transaction, and card data. This information is analyzed, scored, and presented in a HooYu report. HooYu deletes all the user’s Bank Connect data once the client has reviewed the results of the report.

The technology is currently being rolled out to gaming operators, who benefit from the insights into customer affordability and use the information to make more accurate customer risk assessments. In fact, one month after announcing Bank Connect, HooYu introduced new partner MrQ, one of the U.K.’s growing number of online casinos.

Want to meet companies like FinovateEurope alum HooYu? Check out our FinovateEurope 2022 Sneak Peek series and learn more about the companies demoing their latest technologies next month at FinovateEurope in London, March 22 and 23.

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Savings App Plinqit Raises $5 Million in Series A Funding

Savings App Plinqit Raises $5 Million in Series A Funding
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Plinqit
  • Savings app Plinqit has raised $5 million in Series A funding, bringing its total capital to nearly $10 million.
  • The technology helps users save safely and efficiently, and offers rewards for users who improve their financial literacy by engaging in educational content via the app.
  • Plinqit was founded in 2015 by CEO Kathleen Craig

Michigan-based savings app Plinqit has secured $5 million in funding this week. The company, which made its Finovate debut in 2019 at FinovateFall in New York, will use the new capital to help scale the business to meet growing demand. The Series A round brings Plinqit’s total capital to just under $10 million.

“Financial wellness is crucial for all of us in financial services,” Plinqit founder and CEO Kathleen Craig said. “We created Plinqit to help builders create solutions that truly help people in a way that is engaging and rewarding. It was critical for us that it was technology that they would want to use – and they are.”

The round was led by Nashville, Tennessee-based Fintop Capital and New York’s JAM FINTOP. Also participating in the investment were Invest Detroit, Michigan Rise, and Michigan’s 4Front Credit Union.

Plinqit is a brandable, mobile-first savings app – built by Millennials for Millennials. The platform empowers users to create up to five savings goals, and begin setting aside funds for each goal while earning rewards. The app’s Build Skills feature not only helps users develop financial literacy, it also pays them for doing so, rewarding users for engaging with content which boosts user engagement for financial institutions that offer the technology. Plinqit also offers a virtual account management system – Vi.Ledger – which enables financial institutions to build their own custom savings programs using virtual accounts within the app.

Launched in 2015, Plinqit is one of the leading solutions offered by app development company, HT Mobile Apps (HTMA). The technology has been adopted in recent years by a number of community financial institutions including The Milford Bank ($482 million in assets), ChoiceOne Bank ($244 million in assets), and First Arkansas Bank & Trust ($760 million in assets). “We created Plinqit as a tool to not only help customers safely and securely meet their savings goals, but to also help financial institutions compete for deposits and develop deeper relationships with their customers,” Craig said when the partnership with First Arkansas Bank & Trust was announced in the summer of 2020.

Last fall, Plinqit announced an integration with the digital banking platform of fellow Finovate alum Q2. Funds saved on the Plinqit app are FDIC- or NCUA-insured, and the service is free to users.

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Delta Air Lines and American Express Partner on BNPL Option

Delta Air Lines and American Express Partner on BNPL Option
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, American Express, Daily news
  • American Express partnered with Delta Air Lines to offer American Express’ buy now, pay later tool, Plan It, as a payment option at checkout.
  • Plan It allows users to select from one to three repayment options and charges a fixed monthly fee.
  • Plan It will be added as a checkout option on Delta’s mobile app this spring.

American Express and Delta Air Lines partnered this week to offer their shared customers a buy now, pay later (BNPL) option when booking flights on Delta.com’s web interface.

The partnership, which leverages American Express’ Plan It tool, enables American Express U.S. consumer card members to split up purchases of over $100 into equal monthly installments with a fixed fee.

Launched in 2017, Plan It allows customers to select from one to three repayment options, depending on factors such as the purchase amount, the cardholder’s account history, and their creditworthiness. Plan It charges a fixed monthly fee that is disclosed before the transaction.

As an added advantage over other BNPL plans, Plan It is built into the American Express card and does not require users to enroll, plus cardholders earn rewards as they usually do with their card payment. Further, cardholders do not need to keep track of additional payments, since they are included in their monthly statement.

As Anthony Cirri, Executive Vice President for Global Consumer Lending and Cobrand at American Express highlighted, the timing of the partnership is ideal. “It’s the perfect time to bring these together as people are booking long-awaited trips, and our card members can book with confidence knowing they are backed by the strong partnership between Delta and American Express.”

Plan It has benefited from the rising popularity of BNPL and alternative payment options. The volume of new plans originated in the fourth quarter of 2021 was more than double the volume in the fourth quarter of 2020. And 65% of plans originated in the last year were from new users.

Travelers will see Plan It as a checkout option on Delta’s mobile app this spring.

Photo by Miguel Ángel Sanz on Unsplash

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Backbase Inks New Partnership with Boston-based Eastern Bank

Backbase Inks New Partnership with Boston-based Eastern Bank
By David Penn Posted on
Categories: Alumni News, Backbase, Daily news
  • Backbase has forged a new partnership with New England-area financial institution, Eastern Bank.
  • Eastern Bank will leverage Backbase-as-a-Service and Backbase Digital Sales technology to streamline its new account opening process, as well as create and release new financial products and services.
  • With $24 billion in assets and more than 120 locations, Eastern Bank serves customers in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island.

A new partnership between engagement banking innovator Backbase and Eastern Bank will bring a fully digital account opening experience to the Boston-based financial institution’s customers. Eastern Bank ($24 billion in assets) will deploy both Backbase-as-a-Service and Backbase’s Digital Sales solutions, which will give Eastern the technical infrastructure it needs to create and deliver new products and services faster.

The deployment of Backbase’s Digital Sales solution will enable Eastern Bank to combine Backbase’s out-of-the-box accelerators and integrations with solutions from third-party fintechs to offer their customers personalized digital banking services – as well as remove much of the complexity customers encounter when opening new accounts. Eastern Bank expects to offer Backbase’s Digital Sales capabilities in the first half of this year to new retail customers. The bank’s new commercial and business banking customers can expect a similar offering later in 2022.

“We are thrilled Eastern Bank chose to collaborate with us around this commitment to technology and innovation,” SVP of Americas at Backbase Vincent Bezemer said. “Like us, they are passionate about delivering the best digital experience possible for customers.” Bezemer complimented Eastern Bank’s team as “agile and digitally-focused” as well as having a “human-centered approach” to collecting and incorporating customer feedback to ensure high-quality customer experiences.

Founded in 1818, Eastern Bank offers banking, investment, and insurance products and services for retail consumers and businesses in parts of Massachusetts, New Hampshire, and Rhode Island. The bank earned the 2021 Impact Innovation Award for Artificial Intelligence and Advanced Analytics by Aite-Novarica Group and was a finalist in the Best Small Business Banking Solution category at the 2021 Finovate Awards.

A multiple-time Finovate Best of Show winner, Backbase is one of Finovate’s oldest alums, having made its debut on the Finovate stage in 2009. More recently, the company participated in Finovate’s return to live events last September as part of FinovateFall in New York. At the conference, Backbase demonstrated its complete customer onboarding technology that consolidates customer finances via direct deposit, billpay auto linking, and debit card account opening.

Founded in 2003 and headquartered in Atlanta, Georgia, Backbase was named “Best in Class” among digital banking platform vendors in Javelin’s 2021 Digital Banking Platform Scorecard. In addition to its partnership with Eastern Bank, Backbase has collaborated in recent months with Wyoming-based Blue Federal Credit Union and St. Louis, Missouri-based, family-owned First Bank.

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U.S. Bank Taps Payactiv to Help Companies Offer Employees Earned Wage Access

U.S. Bank Taps Payactiv to Help Companies Offer Employees Earned Wage Access
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, PayActiv, US Bank
  • Clients that use U.S. Bank’s prepaid Focus Card for payroll can offer their employees access to their wages as they earn them, thanks to a new partnership between U.S. Bank and Payactiv.
  • Employees will not only benefit from early access to their wages, but will also have access to Payactiv’s other financial wellness tools.
  • “We’re proud to be on the leading edge, developing a solution that helps our business clients provide additional convenient options for their employee payroll,” said U.S. Bank Payment Services Vice Chair Shailesh Kotwal.

U.S. Bank is partnering with financial wellness company Payactiv this week. Under the agreement, U.S. Bank will leverage Payactiv’s earned wage access (EWA) tools.

U.S. Bank’s commercial clients that use U.S. Bank’s prepaid Focus Card for payroll can enable their employees to access a portion of the wages they’ve already earned. Employees can access their funds on their U.S. Bank Focus Card, via an instant deposit into their checking account, or other payment options.

In addition to benefitting from early payouts, employees will have access to other financial wellness services such as savings and bill management tools, financial education, and a discounts marketplace.

“The future of payments is one where companies may soon say goodbye to the traditional, biweekly payroll,” said U.S. Bank Payment Services Vice Chair Shailesh Kotwal. “Employers recognize that providing employees on-demand access to earned wages improves employee satisfaction and recruiting efforts. We’re proud to be on the leading edge, developing a solution that helps our business clients provide additional convenient options for their employee payroll.”

Payactiv was founded in 2011 to help companies send their employees their wages as they earn them, as opposed to bi-weekly. “We provide timely access to liquidity – so a single mother can pay for daycare between paychecks and a healthcare worker can cover an unexpected car expense,” explained company CEO Safwan Shah.

California-based Payactiv has raised $134 million in funding and earned a Best of Show award for its 2016 demo. In 2020, the Consumer Financial Protection Bureau (CFPB) approved Payactiv’s EWA program as exempt from the federal Truth in Lending Act and Regulation Z rules governing creditors. “Employers can take comfort in knowing that PayActiv continues to be the leader in responsible EWA for employees,” Shah said at the time.

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Revolut’s Newest Acquisition Accelerates its Move into India

Revolut’s Newest Acquisition Accelerates its Move into India
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, Revolut
  • Revolut has acquired India-based Arvog Forex. Terms of the deal were not disclosed.
  • The purchase will help Revolut launch services in India in the latter half of this year.
  • Arvog Forex has more than 20 branches across India and served more than 15,000 customers last year.

Global financial services innovator Revolut recently acquired Arvog Forex to deepen its roots into India, a region with a population of 1.3 billion and ripe for fintech disruption.

Arvog Forex, an international money transfer and currency exchange company, is headquartered in Mumbai. With more than 20 branches across India, the company served over 15,000 people with its remittances and other forex services last year.

Revolut, which plans to invest $25 million into the Indian market in the coming years, expects the purchase will strengthen its foundation in India. The company initiated its India expansion plans last April after hiring Paroma Chatterjee, a former Flipkart executive, to lead its India operations. Under Chatterjee’s leadership, Revolut plans to launch bespoke financial products that serve the unique needs of Indian consumers.

The company is aiming to launch services in India in the latter half of this year. The Arvog Forex acquisition should streamline this, helping Revolut offer remittances and multi-currency accounts to Indian customers.

Chatterjee calls the buy a “first step” towards the company’s aspiration to usher in a “digital financial revolution” in India. “Our significant investment plans, this acquisition, and the quality of the team we are putting together reflect our intention to rapidly roll out these innovative products and services. India is a key region in our global expansion plan and this acquisition is testament to the rapid strides we want to make here. It is an incredible time to be a fintech company in India and we plan to make the best of this opportunity,” she said.

U.K.-based Revolut was founded in 2015 and has already expanded into other Asia-based countries, including Japan and Singapore, but has yet to enter into China, a market that will prove to be highly competitive. On the other side of the globe in North America, Revolut has applied for a bank charter in the U.S., but withdrew its operations in Canada last March. The fintech plans to reenter the region later this year.

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Madison Dearborn Buys MoneyGram in $1.8 Billion Deal

Madison Dearborn Buys MoneyGram in $1.8 Billion Deal
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, MoneyGram
  • Madison Dearborn Partners has agreed to acquire MoneyGram in a $1.8 billion deal.
  • The deal will offer shareholders $11 per share and will make MoneyGram a privately-held company.
  • MoneyGram anticipates the acquisition will help it advance digital growth and compete against smaller fintechs.

MoneyGram, an 82-year-old fintech, announced today it has agreed to be acquired by private equity investment firm Madison Dearborn Partners (MDP) in a $1.8 billion deal. The transaction is expected to close in the fourth quarter of this year.

When the deal closes, MoneyGram shareholders will receive $11 per share. In addition, MoneyGram, which is currently listed publicly on the NASDAQ under the ticker MGI, will no longer be listed on a public exchange. Logistically, MoneyGram will continue to operate under its own brand. Company CEO Alex Holmes and the existing leadership team will continue to lead MoneyGram from the company’s headquarters in Dallas, Texas to continue to serve its 150 million customers.

Holmes anticipates the deal will not only deliver value to shareholders, but will also help MoneyGram as it seeks to advance its digital growth. “MoneyGram has undergone a rapid transformation over the last several years to expand our digital capabilities and adapt to the evolving needs of our customers. By partnering with MDP and becoming a private company, we will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings, while leveraging our global platform for new customers and use cases.”

The move will place MoneyGram in a better position to compete with the onslaught of fintechs in the cross-border payments arena. And in today’s increasingly decentralized economy, this competition goes beyond cross-border payments companies of the last decade such as Azimo, Wise, Visa’s CurrencyCloud, and Payoneer. Looking ahead, MoneyGram will need to deepen its crypto roots.

The Dallas-based company dipped its toe in the crypto waters in 2018 when it initiated a partnership with Ripple to leverage xRapid for remittance payments. And last fall, MoneyGram began collaborating with Stellar to enable consumers using Circle’s USDC stablecoin to receive cash funding and payout in local currency.

“We are looking forward to applying our substantial experience growing digital businesses and deep payments knowledge to help MoneyGram further strengthen its market-leading cross-border capabilities and enhance its digital platform,” said MDP’s Managing Director Vahe Dombalagian.

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