Paga Acquires Apposit, Announces Geographic Expansion

Mobile money operator Paga is poised for growth. The Nigeria-based fintech acquired U.S. software company Apposit and announced plans to expand its services geographically.

Apposit was founded in 2007 and builds software to power African tech businesses. The region is, as the company states on its website, a place where “formidable challenges and exceptional opportunities abound.”

Paga will leverage Apposit to expand into Ethiopia, a country that deals with similar cash and payment issues to Nigeria. To help fuel the expansion, the company will tap the experience of Apposit Co-founder and CEO Adam Abate, who will serve as CEO of Paga Ethiopia.

Through the acquisition, Paga Founder and CEO Tayo Oviosu said, “we not only gain a scalable world-class internal engineering team, but we also are in a stronger position to grow our global payments business.”

Paga and Apposit first partnered in 2009. After bringing on Apposit’s 62 employees, Paga’s staff now totals 530+ people. Additionally, the company adds Addis Ababa, London, and Mexico City to its list of office locations.

“Last year we refined our mission and vision to birth our massive transformative purpose: To make it simple for one billion people to access and use money,” added Oviosu. “Apposit has demonstrated strong alignment with our purpose and they have some of the very best engineers I have been privileged to work with, in over two decades in technology in Silicon Valley and elsewhere.”

Terms of today’s deal were not disclosed.

Three Key Lessons We Learned from Plaid

Unless you’ve been living under a rock, you’ve probably heard that Visa is acquiring Plaid for a deal that’s worth $5.3 billion. Finovate’s own David Penn covered the story for us on Monday, and virtually everyone in the fintech space is talking about it.

What you might not know, though, is that Plaid was on stage at one of our events way back in 2014. At that point they were already well on their way – they were close to signing their 1,000th customer, and they had already signed companies from spaces like lending, payments, expenses and accounting, asset management, and PFM. In the years following their time on stage, we’ve seen countless demoing companies come across our stage who relied on Plaid to underpin their offerings from a wide variety of areas.

The fact that they were so widely used at such an early stage is a testament to the quality of their code, but there are also a few key lessons to take away from their success:

  1. A valuable tool can be worth more than what you build with it. The old saying goes something like “in the gold rush, it’s better to sell pickaxes than mine for gold.” That’s precisely what Plaid did, putting together a product that was attractive to a wide variety of fintech companies to capitalize on the massive wave of fintech startups that came through the last decade. Whether those startups survived or not, Plaid became a part of all of them, guaranteeing their own payday and removing the uncertainty that so many fintech startups faced.
  2. Simplicity is an asset. Plaid’s API is simple to understand,  install, and build on, which has made it attractive to developers from across fintech. This simplicity also means that the tech is highly versatile, floating easily from one field to another.
  3. Connections are vital. At the time that Plaid was gaining momentum, the API world was a very competitive one, with a lot of providers fighting to get adopted. The technology itself was very important, obviously, but so was the work they did in coming to events like FinDEVr to make sure that developers knew what their code could do. The ability to evangelize for your product is crucial to success, and building momentum frequently has to be done through face-to-face connections with influencers in the industry.

There are many more lessons to be drawn from Plaid’s example, but for innovators in the space, those three lessons seem the most important to me. Plaid’s connections, simplicity, and business strategy put them in a position to succeed and become the latest fintech royalty. Congratulations to them on their success, and the challenge is laid out for the rest of the industry to follow in their footsteps.

Raisin’s New Acquisition Gives Company Access to the U.S. Market

European deposit marketplace Raisin announced today it acquired New York-based Choice Financial Solutions. Terms of the acquisition, which marks Raisin’s fourth purchase in the past year, were undisclosed.

Raisin will license Choice FS’ technology to banks in the U.S., a move that will bring the company one step closer to its U.S. launch. Last year, Raisin teased the geographical expansion with the appointment of Paul Knodel as U.S. CEO.

Raisin U.S. CEO Paul Knodel

“Joining forces with Choice Financial Solutions lets Raisin begin offering cutting-edge services to banks and customers before we even launch our U.S. platform,” said Knodel. “As a leading innovator in the deposits space, Raisin sees Choice FS as a perfect fit for our mission in the U.S. deposits market. The enthusiastic market feedback we have already received affirms how ripe the savings space is for just this type of personalization.”

Choice FS has a decade-long track record of providing banks with technology to help their clients save for long-and-short-term goals. The company’s secret sauce is customization– something modern consumers have become accustomed to in today’s era of BigTech solutions. Choice FS allows banks to customize terms, distributions, amounts, and withdrawals to maximize return on savings accounts, creating a highly-personalized savings experience with an intuitive user interface. Company founder and CEO Daniel Smith refers to this personalization as “the missing piece” for banks and depositors.

Raisin was founded in 2012 and has since brokered $20.6 billion (€18.5 billion) for 200,000 customers in 28+ European countries and 90 partner banks. The company provides a free marketplace where consumers can browse European deposit products, ETF portfolios, and, in Germany, pension products.

Visa to Acquire Plaid in $5.3 Billion Deal

Updated 1/14/2020: The first big fintech acquisition of the year just crossed the headlines: Visa has agreed to acquire innovative fintech Plaid for a reported $5.3 billion in “total purchase consideration.”

“Today marks an important milestone for our company and for fintech,” company co-founder and CEO Zach Perret wrote on the Plaid blog earlier today. “What started with two founders building in a cramped conference room has become an incredible network that enables millions of consumers to interact with over 2,500 digital finance products.”

Plaid’s technology connects digital consumers with thousands of apps and services ranging from Transferwise and Betterment to Chime, Acorns, and popular payment app, Venmo. The company estimates that one in four individuals with a U.S. bank account have used Plaid to connect with thousands of developers across 11,000+ financial institutions.

Visa said the acquisition will bolster the company’s capacity to serve and reputation with fintech developers – especially when it comes to providing them with enhanced payment functionality and related value-added services. Visa also believes the acquisition will help open new business opportunities both in the U.S. and around the world.

“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” Visa CEO and chairman Al Kelly said. “Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions, and consumers.”

Visa participated in Plaid’s Series C round in 2018, which was led by Index Ventures and Kleiner Perkins. The company raised $250 million in that funding raising effort. Plaid began the year with an acquisition of its own, purchasing account aggregation and data analytics technology provider Quovo in January of 2019. The value of that deal was not disclosed; Bloomberg reported that the sticker price for Quovo could have been as high as $200 million. Quovo, incidentally, is also a FinDEVr alum, participating in our New York developers conference in 2017.

Plaid demonstrated its technology at FinDEVrSiliconValley in 2014, demonstrating how its API for Financial Infrastructure enabled developers to leverage data quickly, efficiently, and securely power fintech applications. Headquartered in San Francisco, California and founded in 2012, Plaid had raised $310 million in funding previous to today’s announcement.

The ripples from the acquisition news are reverberating throughout the fintech community. And while some are worried about the ability of the innovative startup from San Francisco continue to drive change in the industry, others are busy heralding the news as a victory for fintech and incumbent financial services firms, alike.

Indeed, the acquisition of Plaid by Visa has put other fintechs involved in financial data on notice that they too may hear an inquiring knock on their proverbial doors. One observer on Twitter asked “Will $MA pick up Finicity now?” As of this writing, neither company has deigned to comment.

Nebula Merges with Open Lending, Forming a New Publicly Traded Company

Lending solutions provider Open Lending has agreed to merge with Nebula Acquisition Corporation, an acquisition company sponsored by True Wind Capital.

The merger will take place via an acquisition in which, once finalized, Nebula will purchase Open Lending and form a new Delaware holding company called Open Lending Corporation. The new entity will be publicly-traded on NASDAQ with an estimated value of $1.3 billion.

Members of Open Lending’s executive team– John Flynn, cofounder, president, and CEO; and Ross Jessup, cofounder, CFO, and COO– will lead the new company. Flynn commented that there is “significant runway” for new growth, considering Open Lending’s existing banking relationships and “untapped opportunities” with new partnerships.

Open Lending was founded in 2000 and offers automated lending solutions to banks, specializing in automotive lending. Ultimately, Open Lending helps banks offer near-prime borrowers more attractive borrowing rates without changing the risk profile for the bank. In 2019, Open Lending facilitated more than $1.7 billion in automotive loans for 275+ financial institutions.

“Open Lending’s ability to demonstrate consistent organic growth and high levels of profitability represents an exciting investment opportunity within the risk-based analytics ecosystem,” said Adam Clammer, Nebula co-CEO and founding partner of True Wind. “John and his team have developed a highly-scalable technology platform that helps hard working consumers get into a new or used car at the best rate possible. We look forward to partnering with Open Lending’s management team and Bregal at this exciting inflection point in the company’s growth.”

PayPal Buys Rewards Platform in $4 Billion Deal

Payments titan PayPal is shelling out $4 billion today in a transaction to purchase Honey, an online shopping and rewards platform. The deal is PayPal’s 20th acquisition and closely follows the California-based company’s arrangement with GoPay last month that gives it a 70% ownership in the China-based company.

PayPal, which offers solutions for both end consumers and merchants, will leverage Honey to create a better experience for the end customer while giving its merchant clients a boost through increased sales and customer engagement.

Honey brings with it a network of 30,000 online retailers and 17 million monthly active users. PayPal will be able to engage with these shoppers while they are still at the beginning of their online purchasing experience. Leveraging access PayPal’s 275+ million active customers and network of 24 million merchant accounts, Honey will be able to scale up its user base considerably.

Calling today’s purchase as one of the “most transformative” in the company’s history, PayPal President and CEO Dan Schulman went on to praise Honey for its ability to improve the online shopping experience. “The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers,” Schulman said. “As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales.”

Logistically, Honey will stay intact, maintaining its headquarters in Los Angeles. The company’s co-founders George Ruan and Ryan Hudson will continue to lead the Honey team, reporting to PayPal’s Senior Vice President John Kunze.

PayPal showcased its Instant Account Creation feature at FinovateFall 2012. The company has a market capitalization of $120 billion.

FICO Acquires EZMCOM

Analytics and decision management technology company FICO announced two new products this week as it snapped up security access provider EZMCOM. Transactional details of the acquisition were undisclosed.

The acquisition has facilitated the launch of FICO Identity Proofing, digital onboarding technology; and FICO User Authentication, a suite of multi-factor, biometric, and behavioral authentication capabilities.

EZMCOM was founded in 2006. The company’s identity proofing, biometric, behavioral and risk-based authentication technology is used by tier-1 banks across the globe, ultimately serving 60 million customers.

“As our clients expand their digital offerings, they are requesting more sophisticated identity proofing and authentication capabilities to complement our fraud, compliance, customer lifecycle, and customer engagement applications,” said FICO CTO Claus Moldt. “Behavioral and biometric authentication are becoming the gold standard to prevent identity spoofing and improve customer protection, while reducing friction. By adding this technology to our portfolio, we will provide our clients with a seamless approach to authentication and customer onboarding – across digital channels, mobile devices, servers and workstations.”

Founded in 1956 as Fair Isaac Corporation, FICO presented “Rapidly Deliver Contextually-Powered Stream Processing” at FinDEVr New York 2016. 

Q2 Closes Acquisition of PrecisionLender

Last week, Q2 completed its sixth acquisition since its 2004 launch. The digital banking services company closed the books on a $510 million deal to purchase PrecisionLender, a sales enablement platform.

“We are thrilled with the outstanding talent, culture and industry expertise the PrecisionLender team brings to the Q2 family,” said Q2 CEO Matt Flake. “We are also excited about the potential we have to help our customers improve margins, profitability and the quality of their relationship with their key accounts using our combined data insights and commercial banking solutions.”

Q2 will leverage PrecisionLender to further its corporate banking expertise and solidify its leadership in digital banking. Going forward, PrecisionLender will operate as Precision Lender, a Q2 company.

Q2 debuted Q2 Biller Direct at FinovateSpring 2018 and the company’s CIO Lou Senko made a cameo appearance in ALTR’s demo at FinovateFall earlier this year.

eToro’s Latest Acquisition Boosts its Crypto Presence

Social trading and investment platform eToro is making moves this month. In addition to launching CopyTrader in the U.S. last week, the company announced today it has acquired Delta, an app for tracking crypto portfolios.

Delta’s app helps its 1.5 million users track and analyze their crypto portfolios, offering information on more than 6,000 crypto assets traded on more than 180 exchanges.

The deal will close for an undisclosed amount, though TechCrunch rumors the purchase price is around $5 million. Delta is eToro’s second acquisition this year (and overall) after buying blockchain company Firmo in March.

“When we started eToro our goal was to disrupt the world of trading. We wanted to change the way people think about trading and investing, ultimately reducing dependency on traditional financial institutions and make trading and investing more transparent and fun,” said eToro Cofounder and CEO Yoni Assia. “This mission remains our guiding light and we will continue to evolve both organically and by acquisition in order to bring our customers the very best experience.”

eToro’s purchase of Delta shows the company’s increased commitment to the crypto space. Last year the company launched its subsidiary eToroX, a regulated digital asset exchange and crypto wallet to support tokenized asset trading. Doron Rosenblum, Managing Director of eToroX, said that Delta is “a great addition” to eToro’s crypto offering. Rosenblum also mentioned that he plans to integrate Delta into the eToroX platform to allow customers to trade from within the app.

Logistically, the Delta team will become part of eToroX, reporting to Rosenblum, but will continue working from its headquarters in Belgium.

And if you haven’t seen eToro’s video featuring Alec Baldwin pitching the U.S. launch of CopyTrader, here you go:

eToro most recently showcasedCopyFunds for Partners at FinovateEurope 2017. Originally known for being a social trading platform, the company began pioneering bitcoin trading in 2013 via CFDs and in 2017 allowed clients to trade and invest in Ethereum, XRP, Litecoin, and other cryptocurrencies. eToro has raised $223 million since it was founded in 2007.

Avaloq Seeks Exit: M&A or IPO?

Digital banking technology provider Avaloq is at a crossroads, Reuters reports. The Swiss company is preparing to sell or go public.

The decision comes as Avaloq’s private equity shareholder Warburg Pincus, which owns a 45% stake in Avaloq, seeks an exit. Other shareholders in the company include founder Francisco Fernandez, who owns 28%, as well as Avaloq staff and management, which hold 27% ownership.

If recent exit trends persist, Avaloq will take the acquisition route, likely being picked up by a wealth management firm, large bank, or a larger competitor, such as Temenos, which is much more of a heavyweight in the industry. “I always said I would never do an IPO before getting to a critical size or maturity needed for such a step. I said roughly 1 billion in revenues,” Fernandez said in a Reuters report in 2017. “Counting back, we think that in three to four years we should be there.”

No matter which route Avaloq takes, it will likely be placed among fintech unicorns. The company was valued at $1 billion in 2017 when it initiated the agreement with Warburg Pincus.

Avaloq most recently demoed at FinovateAsia last year where it showcased its ecosystem that serves as an app store for banks using open APIs. The company launched in 1985 as BZ Informatik and has since grown its offerings to include core banking software, digital wealth management, as well as core banking SaaS and BPaaS products.

Avaloq, which has raised $350 million in funding, provides technology that helps its 150 clients manage $4.5 trillion. Among the company’s clients are Barclays, BBVA, Deutsche Bank, HSBC, Rothschild, Societe Generale, and Vontobel.

Digital Realty to Buy Interxion for $8.4 Billion

Amsterdam-based Interxion, which provides carrier and cloud-neutral colocation data centre services, announced this week it has agreed to be acquired by Digital Realty, a data center services company.

The transaction values Interxion at $8.4 billion and brings added value to the company. Interxion will benefit from Digital Realty’s global footprint, helping it build its presence in the Americas, EMEA, and Asia Pacific. “We also believe our stakeholders will benefit from Digital Realty’s investment grade balance sheet and lower cost of capital,” said Interxion CEO David Ruberg.

“The transaction is expected to be accretive to the long-term growth trajectory of the combined organization, and to establish a global platform that we believe will significantly enhance our ability to create long-term value for customers, shareholders and employees of both companies,” said Digital Realty CEO A. William Stein.

Once the deal is finalized the new entity will be called Interxion, a Digital Realty company. Interxion CEO David Ruberg will serve as the CEO of the combined company’s Europe EMEA business while Stein will serve as CEO of the combined company.

Finalization of the deal is subject to closing conditions and shareholder approval. The transaction is expected to close in 2020.

Interxion was founded in 1998 and now serves its customers through 50 data centrs in 11 European countries. The company is partnered with more than 700 connectivity providers, 21 European internet exchanges, as well as many cloud and digital media platforms.

At FinDEVr Silicon Valley 2015, Interxion’s VP of Enterprise Bill Fenick, gave a presentation titled Quants in a European Cloud.

SparkPost to Acquire eDataSource for Undisclosed Amount

Predictive email intelligence firm SparkPost announced plans to acquire eDatasource this week. Terms of the deal, which marks SparkPost’s second acquisition, were undisclosed.

SparkPost sought eDataSource, an email delivery solutions and insights company, for its inbox performance insights and reputation management tools in hopes to create a fully integrated email sending and analytics platform.

“The industry has long accepted a certain level of lost subscribers, however, those stakes are considerably higher based on some of the email provider changes over the last few years. Today, a miss at the sending layer will result in a significant hit to a marketer’s total acquisition costs, and can be avoided by making small adjustments,” said SparkPost CEO Rich Harris. “By combining forces, we can now integrate insights with your sending for direct action and measurement. Our two companies coming together solves this problem.”

The new offering from the combined companies will offer:

  • Enhanced predictive inbox performance insights
  • Increased email engagement and conversion
  • Illustration of how emails are performing in the context of a larger marketing campaign

SparkPost plans to ship new offerings in the “next few quarters.” On that list are an automatic seeding tool and a real-time blacklist alert that is weighted to actual sending patterns.

At FinovateSpring 2019, SparkPost demoed Signals, a tool that analyzes email sending and data from across the company’s email network to warn users about email issues. Founded in 2008, SparkPost powers the delivery of more than 37% of all B2C email across the globe.