Mergers & Acquisitions

Investment App Stash Grabs Financial Literacy Platform PayGrade

Investment App Stash Grabs Financial Literacy Platform PayGrade
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, Mergers & Acquisitions, Stash

Along with the fanfare surrounding so-called meme stocks and the “power of the individual trader” last year, there was a dark side. Investing and trading platforms that had embraced gamification were being accused of not fully preparing their customers for the dangers involved in stock trading – especially in volatile, illiquid stocks. Critics demanded that these platforms spend more time – and money, if necessary – educating their customers for their own benefit as well as for the good of the investing and trading industry, which has recovered impressively since the dot.com bust 20 years ago.

This is the spirit in which we take the news that Stash, a New York-based, mobile-first investment platform that made its Finovate debut in 2017, has acquired financial literacy platform PayGrade. The terms of the deal were not disclosed, but the acquisition marks Stash’s first acquisition and its biggest fintech news headline since a whopping $125 million Series G fundraising back in February.

Brandon Kreig, CEO and co-founder of Stash said that the acquisition was an example of the company’s mission to “empower everyday Americans to invest for the future.” He noted that personal finance education is not emphasized in American schools – with 43 out of 50 states not requiring coursework in personal financial management – and that an overwhelming number of American adults – as much as 80% – live “paycheck to paycheck.”

“With PayGrade,” Kreig explained, “Stash will provide teachers, parents, and children with interactive tools to learn effective money management skills that will last a lifetime.”

Stash enables users to begin investing on its platform with as little as $1 a month. The company’s “Stash Beginner” program allows investing – including fractional share investing – as well as banking, portfolio recommendations, savings strategies, and a Stock-Back card that helps users earn stock every time they use the card for shopping. Stash also offers Growth and Plus plans that add features such as portfolios for children, premium research, and enhanced bonuses for using the Stash Stock-Back card.

Purchasing PayGrade is not the only way that Stash will support the cause of financial literacy this year. Stash’s acquisition news arrived just a few days before the company announced that it was partnering with the Suh Family Foundation and the Big Yard Foundation to launch a financial literacy program over the summer. Dubbed the Stash101 Summer School, the program will be conducted in partnership with Portland Public Schools and will give 160 middle school students an introduction to vital money management and wealth building.

“From investing and banking to education and retirement planning, we believe everyone has the power to achieve greater financial freedom—one step at a time.” Krieg said. “We’re thrilled to deepen our commitment to childhood education through Stash101 and this special summer school program in Portland with the Suhs and Big Yard. It’s going to be a tremendous four weeks for the kids.”

Stash101 is part of the Portland Interscholastic League Trajectory Math Program, which provides additional learning resources for historically underserved students. The course will include a simulated economy experience in which the students will complete tasks like renting desks, while earning a salary and learning about the difference between savings and credit. The classes will be held between July 6 and July 27 at a pair of schools in the Portland School system.

Photo by Anna Nekrashevich from Pexels

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Ping Identity Acquires Fraud Detection Firm SecuredTouch

Ping Identity Acquires Fraud Detection Firm SecuredTouch
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, Mergers & Acquisitions, Ping Identity, SecuredTouch

A pair of Finovate alums have announced plans to “tie the knot” this week. Intelligent Identity solution provider Ping Identity has agreed to acquire fraud and bot detection and mitigation specialist SecuredTouch. Terms of the transaction were not immediately available.

By leveraging a variety of enabling technologies – including machine learning, AI, behavioral biometrics, and deep learning – SecuredTouch’s technology empowers fraud and risk teams to identify suspicious and potentially malicious behavior across all digital entities. The acquisition will integrate SecuredTouch with Ping Identity’s PingOne Cloud Platform, giving business customers the ability to better understand and prevent malicious activity. Customers will have the option of using SecuredTouch as a standalone solution or as part of the PingOne platform.

Ping Identity founder and CEO Andre Durand said that the acquisition “accelerates” the company’s mission to provide cloud-based identity and anti-fraud solutions to businesses to help them fight a wide range of cyberthreats ranging from emulators to account takeover.

“Identity isn’t just about knowing who your customers are, it’s about knowing when someone is pretending to be a customer,” Durand explained. “As companies undergo massive digital transformation initiatives, the need for seamless, frictionless, and secure identity solutions to confidently understand both those situations is imperative.”

Ping Identity made its Finovate debut at our first European fintech conference in 2012. In the years since, the Denver, Colorado-based company has become the identity management solution provider of choice for 60% of the Fortune 100 and forged partnerships with technology companies like Microsoft and Amazon. Most recently, Ping Identity collaborated with ProofID to enhance identity security for Tesco Bank, the banking division of Tesco, the largest supermarket retail chain in the U.K.

Headquartered in Ramat Gan, Israel, SecuredTouch demonstrated its behavioral biometrics technology at FinovateFall 2018. The company’s solution analyzes more than 100 different behavioral behaviors – from scroll velocity to touch pressure – to create a unique user profile that benefits from continuous verification. Winner of Best Product at the Loyalty Security Association Lion’s Den event this spring, SecuredTouch earned a patent for its continuous use authentication in 2019.

“This is a defining moment for our industry as identity security and fraud come together,” SecuredTouch CEO Alasdair Rambaud said of this week’s acquisition news. “Ping Identity’s enterprise proven and robust platform provides the perfect foundation for SecuredTouch’s advanced fraud detection capabilities.”

Photo by Victor Burnside from Pexels

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Nutmeg Acquired by JPMorgan Chase

Nutmeg Acquired by JPMorgan Chase
By David Penn Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, Nutmeg

Just when you thought the big banks might be getting a little too complacent about the challenge from fintech, JPMorgan announced today that it will acquire U.K.-based digital wealth management platform Nutmeg. Terms of the transaction were not disclosed, but Reuters cited a source who gave Nutmeg a valuation of more than $972 million (£700 million).

JPMorgan Chase CEO of International Consumer Sanoke Viswanathan said that the acquisition would give the bank the opportunity to “build Chase in the U.K. from scratch using the very latest technology.” The Nutmeg acquisition also will complement JPMorgan Chase’s U.K. digital bank launch scheduled for later this year.

A Finovate alum since 2012, Nutmeg was a pioneer in offering affordable, automated financial planning and investment services. Now the largest digital wealth manager in the U.K., Nutmeg has grown into a platform with more than 140,000 clients and $4.9 billion (£3.5 billion) in assets under management. Investors can open an account with as little as £100 or £500, depending on the product, and configure their investment goals and risk level, as well as investment style in a minutes. With a product suite that includes a variety of ISAs (Lifetime, Junior, Stocks and shares) as well as pension and general investment accounts, Nutmeg leverages exchange-traded funds (ETFs) to keep costs low and diversification options broad for investors.

Nutmeg and JPMorgan are far from strangers. The two companies announced a partnership back in November of last year to launch a “bespoke new investment offering” called Smart Alpha for Nutmeg customers. The new Smart Alpha portfolios blend Nutmeg’s core investment principles and expertise in exchange-traded funds and fractional investing with JPMorgan Chase’s in-house multi-asset knowledge and experience. Smart Alpha portfolios are designed for investors of all risk levels who want a globally diversified, dynamic portfolio derives additional returns via smart and transparent security selection.

Photo by Eva Elijas from Pexels

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Ixaris Joins Global Payments Platform Nium

Ixaris Joins Global Payments Platform Nium
By David Penn Posted on
Categories: Alumni News, Daily news, Ixaris, Mergers & Acquisitions

London-based payments optimization company Ixaris has agreed to be acquired by Nium, a global payments platform based in Singapore. Terms of the purchase were not immediately available. The acquisition is expected to be finalized in Q3 of this year.

Founded in 2002 by Alex Mifsud, Ixaris made its Finovate debut at FinovateFall in 2010. In the years since, Ixaris has focused its technology on optimizing payments for the travel sector, offering flexible payment and funding options to help airlines and online travel agents lower fees, earn rebates, and streamline the reconciliation process. Ixaris issued more than 10 million virtual cards in 2019 and, since inception, has processed 24 million transactions for a total payment volume of $7 billion (£5 billion). The issuer of Europe’s first virtual prepaid card in 2003, Ixaris has served more than 200 customers in more than 40 countries to date.

Ixaris Group CEO Mark Anthony Spiteri underscored the importance of – and opportunity in – payment optimization in the travel industry. “As part of the Nium family, we can offer the broadest portfolio of virtual card offerings to travel businesses across the globe,” Spiteri said. “All aspects of our company, from our technologies to our people, perfectly complement Nium and we look forward to increasing our geographic footprint to new regions, including the United States.”

Spiteri took over as CEO of Ixaris in May 2020. He wrote in a blog post at the company’s website that the combination of Ixaris’ virtual card issuance capabilities with Nium’s single API connection to the world’s payment infrastructure will provide “an even broader suite of payment services” for customers of both companies.

To this end, the timing of the acquisition could turn out to be especially auspicious. Spiteri noted that the post-COVID resumption of international travel, a sector he valued at $326 billion (£230 billion), should create major opportunities for his company. “As international travel takes off again in 2021, and the industry ramps up investment in solutions to improve front-end travel experiences and back-end processes,” he said, “we are ready to continue to drive its revolution.”

With more than 130 million customers, Singapore’s Nium is an international B2B payments platform that enables banks, payment providers, travel companies, and other businesses to collect and disburse funds in local currencies in 100+ countries, as well as issue virtual and physical cards globally. A member of the CB Insights Fintech 250, Nium was founded in 2015 by Michael Bermingham and Prajit Nanu.

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Mitek Acquires ID R&D

Mitek Acquires ID R&D
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, ID R&D, Mergers & Acquisitions, Mitek

Identity verification and remote deposit capture solutions provider Mitek has acquired AI-powered biometrics company ID R&D this week. Terms of the deal were undisclosed.

Under the agreement, Mitek will integrate ID R&D’s portfolio of biometric technologies into its own identity verification solution. Additionally, ID R&D will continue operating under its own brand and will still sell its biometrics products directly to the market. The company’s solutions include IDLive Face, a passive facial liveness detection tool; and IDLive Voice, a voice anti-spoofing technology.

By integrating ID R&D’s technology into its own, Mitek will offer consumers and businesses a more holistic identity verification and fraud prevention product that protects a transaction from start to finish. The new solution will offer banks and other organizations with a single authentication tool that offers a simple approach to fighting fraud throughout each step of a transaction.

“With additional resources now available to the ID R&D team, we expect to bring exciting breakthroughs to the market at an even faster pace,” said ID R&D President Alexey Khitrov in a blog post. “Mitek’s financial strength, global reach, and scale will only enhance our ability to expand our core biometric product portfolio.”

ID R&D was founded in 2016 and is headquartered in New York City. The company has raised a total of $5.7 million across two rounds of funding, the most recent investment taking place in May of 2019.

Founded in 1986, Mitek went public in 2011 and now trades on the Nasdaq under the ticker MITK. The company has a market capitalization of $739 million.

The increase in consumers going digital has been beneficial to Mitek. Last year, Mitek saw a year-over-year growth increase of 20%. This growth is likely to increase. In fact, Juniper Research estimates that by 2025, 1.4 billion consumers will be using facial recognition to facilitate secure transactions.

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Acorns Makes Public Debut via SPAC

Acorns Makes Public Debut via SPAC
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, SPAC

Millennial investing app Acorns announced plans today to go public using a merger with a special purpose acquisition company (SPAC).

The SPAC, Pioneer Merger Corp, is a blank check company founded in 2020 that aims to acquire Acorns in a deal valuing the fintech at $2.2 billion. The transaction is expected to complete in the second half of this year. Once finalized, Acorns will trade on the Nasdaq under the ticker OAKS.

Acorns’ new valuation of over $2 billion is more than double its last valuation. The company was estimated to be worth $860 million in January of 2019.

Prior to today’s announcement, Acorns was in the middle of another funding round, which would have added to the $207 million it had already raised since it was founded in 2014. Instead of closing another round of funding in the private markets, Acorns CEO Noah Kerner chose the SPAC route because he felt that Pioneer Merger Chairman John Christodoro was the right partner.

“Now was the time to go public to accelerate our growth and get the tools of responsible wealth-making in everyone’s hands as fast as possible, when they need it most,” Kerner told CNBC. “We just saw this as an accelerant on that journey.”

The timing is also right from a demand perspective. The pandemic, combined with media frenzy around meme stocks, fueled interest from new investors. Acorns clearly benefitted from this, having just completed its best quarter on record. The company doubled its number of subscribers compared to the fourth quarter of 2020 and now counts four million users.

Acorns has long been known for helping its millennial client base invest the “spare change” from their card purchases into index funds. The company has since expanded and now offers a debit card offering and more robust banking services such as mobile remote deposit check capture, direct deposit, check sending tools, and automated IRA investing for retirement.

Photo by Huibre Venter from Pexels

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Zip to Acquire Twisto and Spotii

Zip to Acquire Twisto and Spotii
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, Twisto

Online payments technology provider Zip has agreed to fully acquire remaining shares of BNPL players Twisto and Spotii. The acquisitions are expected to close for $109 million and $16.3 million, respectively.

By purchasing Czech Republic-based Twisto and United Arab Emirates-based Spotii, Australia-based Zip will grow its global presence. Specifically, the deal enables Zip to extend its BNPL services into the Czech Republic and United Arab Emirates.

This follows Zip’s recent expansion into the U.S. and the U.K. that was made possible after it acquired QuadPay in September of last year for $269 million.

Founded in 2013, Twisto is more than just a BNPL technology provider. The company offers its accountholders one-click payment convenience for online purchases, a unique billpay experience by enabling users to pay by taking a photo of the paper bill, and a touchless in-person payments experience with a special payment bracelet. Additionally, Twisto provides a payment card that charges no interest until the following month and an app that makes it easy for users to track their monthly expenses.

“With Twisto’s existing operations in Central Europe, we are uniquely positioned to tackle the $1.1 trillion European eCommerce market,” said Twisto Founder and Chief Executive Officer Michal Smida. “Being part of Zip’s global platform will allow us to accelerate growth, expand to new markets, win global merchants operating in Europe, leverage global partnerships already in place and broaden our product offering. We share the same ethos – striving relentlessly to deliver the best omnichannel payments experience to both customers and merchants.”

Spotii is relatively new to the BNPL game, having been founded last year by Anuscha Iqbal and Ziyaad Ahmed. Despite this short tenure, the company has already seen impressive traction. Not only has Spotii integrated 650 merchants into its platform, it has also grown its total transaction volume at an average of 90%+ month-on-month since it was founded.

The Twisto and Spotii acquisitions are expected to be finalized in the fourth and third quarters of this year, respectively.

Photo by Tomas Sobek on Unsplash

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Acquisition Brings Unicorn Valuation to Ireland’s Fenergo

Acquisition Brings Unicorn Valuation to Ireland’s Fenergo
By David Penn Posted on
Categories: Alumni News, Daily news, Fenergo, Mergers & Acquisitions

Irish regtech Fenergo has agreed to be acquired by a pair of private equity firms, Astorg of Paris and Bridgepoint of London. The deal, which involved selling a majority take worth $600 million, values Fenergo at $1.1 billion (€900m), and will give the company additional capacity to “make strategic acquisitions and stay ahead of the competition.”

“We are delighted that Astorg and Bridgepoint have chosen to invest in our company, providing us with the financial strength required to pursue our ambitious high-growth strategy,” Fenergo founder and CEO Marc Murphy said. “Both Astorg and Bridgepoint have enormous experience and credibility in our sector, something I am keen to leverage over the coming years. Ultimately, we only exist to serve the needs of our customers. We are looking forward to partnering with them in the next phase of our development.”

Founded in 2009 and headquartered in Dublin, Fenergo made its Finovate debut three years later, demonstrating its innovative client onboarding and account opening management solution. Since then, Fenergo has established itself as a major player in the space, partnering with 32 of the world’s top 50 financial institutions, as well as technology companies like IBM, PwC, and Luxoft. The company says its technology has provided clients with 82% reduction in onboarding times, 34% savings in audit costs, and 7x ROI in four years or less.

Fenergo began the year with the launch of its KYC & Onboarding for Salesforce solution, connecting its client lifecycle management (CLM) technology and regulatory intelligence with Salesforce’s CRM. The integration makes it easier for banks and other financial institutions to enhance the customer experience by providing a more seamless onboarding process.

“In today’s highly challenging business environment, there is no margin for error in delivering exceptional, digital, and joined-up customer experiences,” Murphy explained when the new offering was launched. “Automation is key so that customers can be onboarded without unnecessary manual intervention in the back-end processes. Salesforce is the launchpad for automated onboarding while Fenergo ensures compliance by design through API-powered multi-channel orchestration.”

Fenergo was awarded top honors in the Client Lifecycle Management Solution category at the Ninth Annual WealthBriefing European Awards this month, echoing the recognition the company received at the beginning of the year from Asian Private Banker. So far in 2021, Fenergo has forged partnerships with Anglo-Gulf Trade Bank and Mizuho Americas.

Check out our interview last summer with Fenergo’s James Follette on the challenges of digital transformation in the age of COVID-19.

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PayPal’s Newest Acquisition is a Move Toward a Next-Generation Digital Wallet

PayPal’s Newest Acquisition is a Move Toward a Next-Generation Digital Wallet
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, PayPal

U.S. payments platform PayPal has been slowly inching toward becoming a super app in the past few years. Today’s news that the California-based company has acquired Happy Returns indicates a step further toward that goal.

Terms of the deal are undisclosed.

“The post-purchase experience is something we’ve been looking into, since it’s such a pain point — people want to shop online and return in store, and vice versa,” PayPal SVP of Consumer In-Store and Digital Commerce Frank Keller told CNBC in an interview. “For retailers, we’re providing more comprehensive services beyond payments.”

Happy Returns launched in 2015 to provide box-free, in-person returns for online orders. The company sees the benefits as three-fold– it makes for a better customer experience, it is less expensive for the merchant, and is less wasteful and therefore better for the environment.

Consumers making purchases at one of Happy Returns’ hundreds of brand partners can use the company’s software to make returns at 2,600+ drop-off locations in 1,200+ cities across every U.S. state.

What started as PayPal’s flagship payments platform expanded to encompass the pre-purchase shopping experience when the company acquired Honey in 2019. Today, with the addition of Happy Returns, PayPal adds another element to serve the post-shopping experience to its already robust platform.

This holistic shopping experience is in line with PayPal CEO Dan Schulman’s plan for the company. Schulman recently announced PayPal will roll out a “next-generation” digital wallet that will offer a personalized shopping, financial services, and payments experience.

Photo by Nick Fewings on Unsplash

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Divvy Sells to Bill.com for $2.5 Billion

Divvy Sells to Bill.com for $2.5 Billion
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Bill.com, Daily news, Mergers & Acquisitions

Corporate expense management platform Divvy has agreed to sell to small business financial software provider Bill.com for $2.5 billion.

Adding Divvy’s technology to its platform expands Bill.com’s solution. The new capabilities will help the California-based company enable its 115,000 customers to automatically manage accounts payable, accounts receivable, and corporate card spend. Additionally, Divvy’s tools will offer businesses real-time insight into their B2B spending and provide them access to multiple payment solutions.

Combining the two companies also boosts Divvy’s capabilities. The Utah-based company will be able to offer its 7,500 small business customers automated payable, receivables, and workflow capabilities. “As we listened to our customers, we heard them ask for a comprehensive payments platform so that they don’t have to use multiple software systems to manage their finances,” said Divvy CEO and Co-Founder Blake Murray. “Today I’m proud that Divvy is joining Bill.com to bring the one-stop-shop platform that our customers and the market have been asking for.”

“Since founding Bill.com, I have been driven by the desire to build solutions that make a real difference for small and mid-sized businesses. Customers have been asking us to help them with their spend management, and I am excited that together with Divvy, we can deliver on that ask, furthering our vision to transform SMB financial operations. Our expanded platform will provide more automation and real-time information to SMBs, enabling them to make more informed decisions,” said Bill.com CEO and Founder René Lacerte. “We are excited to work with the talented Divvy team. We have a shared passion for helping SMBs succeed and both companies are driving our customers’ digital transformations. Together, we can further empower SMBs to transition quickly and easily.”

Today’s deal is expected to close by the end of September and is subject to regulatory approvals closing conditions.

Bill.com was founded in 2006 and went public in 2019. With a market capitalization of $12.33 billion, the company trades on the New York Stock Exchange under the ticker BILL.

Founded in 2016, Divvy has raised $418 million from investors including PayPal Ventures, Insight Partners, and New Enterprise Associates.

Photo by Maranda Vandergriff on Unsplash

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Mastercard to Acquire Digital Identity Specialist Ekata for $850 Million

Mastercard to Acquire Digital Identity Specialist Ekata for $850 Million
By David Penn Posted on
Categories: Daily news, MasterCard, Mergers & Acquisitions

Mastercard’s announced $850 million acquisition of digital identity firm Ekata is a reminder that there is no way forward in digital commerce without a 21st century attitude toward issues of security and trust.

“The shift to a more digital world requires real solutions to secure every transaction and instill trust in every interaction,” Mastercard president of cyber and intelligence solutions Ajay Bhalla said. “With the addition of Ekata, we will advance our identity capabilities and create a safer, seamless way for consumers to prove who they say they are in the new digital economy.”

Seattle, Washington-based Ekata offers global identity verification to enable businesses around the world to link digital transactions to the people who make them. Via APIs and a SaaS tool, Ekata leverages data science and machine learning to help businesses detect fake accounts, cross-verify consumer data, reduce payment risk, and fight transaction fraud. With more than 2,000 corporate partners ranging from global merchants and financial institutions to marketplaces and digital currency platforms, Ekata enables its businesses to gain unique and valuable insights that allow them to make better risk decisions about their customers.

“The acceleration of online transactions has thrust global digital identity verification to the forefront as one of the biggest opportunities to build digital trust and combat global fraud,” Ekata CEO Rob Eleveld said. “The right identity verification solutions enable inclusive and frictionless experiences while, at the same time, ensuring customer privacy, control and security. Becoming part of the Mastercard Identity family ensures a broader, collective approach to meeting the growing demands of the digital economy.”

Founded in 2019, Ekata unveiled its merchant onboarding solution earlier this month. Designed to meet the needs of PSPs, B2B lenders, and marketplaces working with smaller, micro-merchants and sole proprietors, Ekata’s new platform automates the onboarding process via API and provides for more efficient manual review with a SaaS solution.

“Merchants today have plenty of options and will quickly turn to another payment service provider if an organization adds too much friction at onboarding or takes too long on approvals,” Ekata VP of Global Marketing Beth Shulkin said in a statement. “This is much more than a customer experience issue for PSPs and lenders; losing the lifetime value of a merchant has real bottom-line impact.”

Photo by Brooke Lewis from Pexels

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Avant Acquires Digital Bank Level

Avant Acquires Digital Bank Level
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions

Online lending platform Avant is building out the breadth of services for its underbanked clients this week. The Illinois-based company acquired Zero Financial and its neobank Level for an undisclosed amount.

Level is built on the premise of helping users attain financial freedom. To differentiate itself from traditional financial services offerings, the digital bank offers cash back rewards on debit card purchases, a competitive APY on deposits, early access to paychecks, and no hidden fees.

As a result of today’s deal, Avant will be able to offer its 1.5 million customers access to Level’s digital banking services to augment its existing personal loan and credit card products. The additional banking products will also offer Avant access to more customer data which, in the end, will help in its underwriting process.

Avant CEO James Paris describes the move as “an important element” of the company’s strategy that involves providing underbanked consumers with financial products. “Expanding our product portfolio allows us to serve even more people, offering every consumer access to innovative and rewards-based products to simplify and improve their financial journey,” he added. “We’re looking forward to building on this acquisition and continuing to bring new products to our growing customer base.”

Current Level customers will still be able to make purchases, earn rewards, receive direct deposits to their account, and earn interest. While new customers cannot sign up for a Level account, they are able to join the wait list for Avant’s newly-branded banking product.

Avant was founded in 2012 and has since connected customers with more than $7.5 billion in loans and 400,000 credit cards. The company has raised more than $600 million in equity from investors including JP Morgan Chase and Hyde Park Venture Partners.

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