Mergers & Acquisitions

TIO Networks Closes Purchase of Softgate Systems

TIO Networks Closes Purchase of Softgate Systems
By Julie Muhn (@julieschicktanz) Posted on
Categories: Mergers & Acquisitions, TIO Networks

TIOHomepage

Cloud-based bill payment processor TIO Networks today announced it closed on the acquisition of Softgate Systems. The acquisition of the New Jersey-based bill payment services provider makes TIO the largest walk-in bill payment network in North America.

In a press release, TIO CEO Hamed Shahbazi says the deal “provides a unique opportunity for TIO to scale its business substantially and represents an important corporate milestone as we continue to grow and evolve to meet the needs of our customers.” He continues, “TIO has enjoyed an eight-year relationship with Softgate. …We expect to be able to expand and extend services towards our customer base across North America, with a strong focus on servicing the underbanked and unbanked population.”

Along with the news, TIO cited recent metrics about the combined companies:

  • The two generated 12-month historical revenues of more than $83 million (CAD$105 million)
  • In the last year, the two processed  about 80 million consumer transactions worth over $9 billion
  • The addition of Softgate adds $5 million in incremental EBITDA per year (providing TIO with $30 million in net operating losses)
  • TIO’s geographical footprint has expanded from 15 U.S. states to 46 states.

The financial terms of the deal, for which TIO secured a $5.7 million loan, were divided into three aspects:

  1. $4.6 million in cash
  2. 25 million TIO Network shares issued to Softgate shareholders
  3. $4 million issuance in vendor take-back promissory notes

TIO was founded in 1997 under the name Infotouch Technologies. At FinovateSpring 2012, the company launched TIO Mobile Pay, a mobile app that empowers consumers by allowing them to pay telecom, utility, financial services, and insurance bills using their Visa or MasterCard credit cards, or their debit card. Since then, the Vancouver, B.C.-based company garnered $1.7 million through the issuance of a secondary stock offering, and was awarded second place in the top-10 companies on the 2016 TSX Venture 50. It was also named one of Canada’s 20 hottest and most innovative public tech companies.

Share this:

Send Post Twitter LinkedIn Facebook

Ally Financial Acquires TradeKing for $275 Million

Ally Financial Acquires TradeKing for $275 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Mergers & Acquisitions, TradeKing

TradeKingHomepage

TradeKing, an online brokerage firm that prides itself on straightforward, low pricing, has been acquired by Detroit-based Ally Financial (NYSE: ALLY), a publicly traded financial services company primarily known for auto-lending. The purchase price paid in cash is $275 million.

Ally is purchasing the Florida-based company for its online broker/dealer, digital portfolio-management platform; educational content; and social collaboration channels. According the the Wall Street Journal, the acquisition will serve as a stepping stone to help Ally expand its services into wealth management, mortgages, and credit cards. Ally CEO Jeffrey Brown says, “The addition of wealth management is the next key step in Ally’s digital product evolution and will create a powerful combination of segment-leading direct banking and innovative investment services in a single integrated customer experience.”

The deal is expected to close in Q3 of this year. Once it does, TradeKing’s 180 employees will join Ally Financial. TradeKing, with $4.5 billion in assets under management, will operate under the branding of Ally Financial.

In the early days of Finovate, TradeKing presented the TradeKing Community at FinovateSpring 2008. TradeKing Community is one of the first brokerages to create a social network that enables investors to share their online trades with others.

Share this:

Send Post Twitter LinkedIn Facebook

BBVA Acquires Holvi for Undisclosed Sum

BBVA Acquires Holvi for Undisclosed Sum
By David Penn Posted on
Categories: Holvi, Mergers & Acquisitions

Holvi_homepage_Mar2016

Described by Wired magazine as one of the “hottest startups in Finland,” Holvi has just been acquired by Spanish bank BBVA, a fellow Finovate alum.

“We’re excited about Holvi as we share a vision about the benefit of technology for the customer,” BBVA’s Teppo Paavola said. Paavola, chief development officer and GM of new digital business for BBVA, also praised the way Holvi leveraged technology “to bring a new approach to small business banking, where services essential to a business’s future, such as invoicing, are built into their core offer.”

Holvi_stage_FEU2013

Pictured: Holvi co-founder Tuomas Toivonen demonstrating his company’s platform at FinovateEurope 2013 in London.

“We found the ideal owner in BBVA,” Holvi CEO Johan Lorenzen added in a statement on the Holvi blog. “A bank with the understanding of the digital world to give us the necessary room to grow, and then the scale and expertise to underpin that growth with sound foundations.”

Terms of the acquisition were not immediately available.

Calling itself “Banking for Makers and Doers,” Holvi provides SMEs, freelancers, and entrepreneurs with a business current account that features its own international bank account number (IBAN), as well as a suite of banking, accounting, and invoicing tools to make it easier to manage company finances. Holvi accounts provide automatic financial statements, including a real-time update of VAT balance, and can be used to send invoices and even set up an online store. As of April 2016, Holvi customers in Germany, Austria, and Finland will also get access to a Holvi Business MasterCard.

Last December, Holvi was featured in TheNextWeb’s look at “10 Finnish startups to watch in 2016.” That same month, Let’s Talk Payments included Holvi in a roundup of top Nordic fintech startups. Business Insider also recognized the company last fall, naming it among the “12 hottest” fintech startups in the region. And in September, Holvi launched its Supercharge feature to make it easier for customers to add money to their Holvi accounts.

Founded in 2011 and headquartered in Helsinki, Finland, Holvi demoed its technology at FinovateEurope 2013. The company is an authorized payment institution licensed and regulated by FIN-FSA (the Financial Supervisory Authority of Finland.)

 

Share this:

Send Post Twitter LinkedIn Facebook

United Capital Acquires FlexScore

United Capital Acquires FlexScore
By Julie Muhn (@julieschicktanz) Posted on
Categories: FlexScore, Mergers & Acquisitions

FlexScoreHomepage

FlexScore, a platform that gamifies financial planning, was purchased by California-based advisory firm United Capital this week. Terms of the deal were not disclosed.

United Capital, which holds $15 billion in assets under management, plans to use FlexScore as a tool to help its advisers engage clients.

The FlexScore platform assesses and scores the user’s financial health and assigns action steps (as seen below) to improve their score. The goal is to reach a top score of 1000, which signifies financial independence.

flexscoremystepsUnited Capital CEO Joe Duran commented to Investment News that FlexScore fits the “missing piece” from the company’s digital suite for clients and advisers. Additionally, Duran stated, “The right intersection is not technology alone, or people alone, but when you have an interactive engaging experience that is powered by people.”

In the future, Duran plans to implement the scoring tool within retirement plans to stimulate engagement. The company is in talks with potential partners for this use case.

United Capital began its relationship with FlexScore in 2014 when it purchased FlexScore’s parent company, Valley Wealth, in a deal that excluded FlexScore.

FlexScore co-founders Jason Gordo and Jeff Burrow launched the startup at FinovateSpring 2013. Since then the San Francisco-based company has raised $4.7 million and created a mobile version of the app (launched at FinovateFall 2014 in New York).

Share this:

Send Post Twitter LinkedIn Facebook

BluePay Acquires Billhighway

BluePay Acquires Billhighway
By David Penn Posted on
Categories: Billhighway, Mergers & Acquisitions

Billhighway_homepage_Feb2016

Billhighway, developer of cloud-based financial management solutions for non-profit and member-based organizations, has been acquired by card processor and gateway provider, BluePay.

John Rante, BluePay CEO, highlighted Billhighway’s “innovative technology, a strong annual growth rate, and incredible customer satisfaction.” Rante said Billhighway’s nonprofit vertical was a “great fit” for BluePay and sees the acquisition as an opportunity to grow BluePay’s integrated merchant base.

Billhighway Chairman and Founder Vince Thomas added that the merger will help “improve the level of products and services” the company provides its member-based association and not-for-profit clients.

Terms of the acquisition were not disclosed.

The announcement comes less than a month after Billhighway was again recognized as one of the “Best and Brightest” companies to work for. Billhighway offers a range of products, from its enterprise-grade financial management platform to its prepaid card (which won the “Head of the Class” PayBefore Award in 2014), to the mobile-fundraising solution the company demoed at FinovateFall 2012.

Last fall, Billhighway earned a spot on Deloittes 2015 Technology Fast 500 for North America for the third year in a row. That summer, the company adopted the SnapApp platform to enable development and publishing of interactive content. In March, Billhighway picked up a Silver Stevie Award for Innovation in Customer Service in the Financial Services Industry category, its second win at the Stevies since 2013.

Founded in 1999, Billhighway is headquartered in Troy, Michigan.

Share this:

Send Post Twitter LinkedIn Facebook

Wipro Inks Agreement to Acquire Viteos Group

Wipro Inks Agreement to Acquire Viteos Group
By David Penn Posted on
Categories: Mergers & Acquisitions, wipro

Wipro_homepage_Dec2015

In a bid to grow its fund accounting and business process services and capabilities, Bangalore-based IT consultancy Wipro has agreed to acquire Viteos Group. The Times of India reports a purchase price of $130 million.

Viteos Group provides a proprietary platform built for cross-border, any asset class, any currency, post-trade operations for the U.S. alternative investment-management industry. The company has offices in New York, New Jersey, London, and the Cayman Islands.

Nagendra Bandaru, SVP and head of business process services for Wipro, says Viteos “brings with it experienced leadership, domain expertise, and unique BPaaS capability.” Speaking for Viteos, company founder and CEO Shankar Iyer referred to the acquisition as the “culmination” of his company’s “search for a global partner.”

Wipro_stage_FEU2015

From left: Wipro General Manager Mukund Kalmanker, Wipro general manager, and Sudhakar Babu Tamminedi, Wipro practice head, demonstrated ngGenie myAdvisor at FinovateEurope 2015 in London.

Terms of the acquisition were not immediately available, and the deal is still subject to regulatory review. The acquisition is scheduled to be complete by the end of March 2016.

The deal combines Viteos Group’s buy-side expertise with Wipro’s sell-side credentials in areas such as reconciliation, settlements, and KYC, among others. President of Wipro, CEO Shaji Farooq explained that the trend of IT services moving toward the “as-a-service” model made a deal like this one with Viteos a priority. “Our strategy is to invest in industry vertical platforms which will provide platform-based services to our clients in a transaction/outcome-based pricing model,” Farooq explained. “Viteos will further our strategy in the capital markets domain.”

Viteos Group is Wipro’s second acquisition of the month. The company announced plans to acquire IT consultancy Cellent AG for €73.5 million early in December and, in June, Wipro launched its e-KYC solution which leverages its AI platform, Wipro HOLMES. The company began the year with a major, multiyear, IT outsourcing contract with Allied Irish Banks (AIB).

Founded in 1945 as Western India Palm Refined Oils Limited, Wipro is headquartered in Bangalore, India. A multinational IT consulting and systems-integration firm, Wipro demonstrated its Wipro ngGenie myAdvisor technology at FinovateEurope 2015.

Share this:

Send Post Twitter LinkedIn Facebook

2015: A Year in Finovate Alumni Mergers and Acquisitions

2015: A Year in Finovate Alumni Mergers and Acquisitions
By David Penn Posted on
Categories: Akimbo Financial, Aurora Financial Systems, Authentify, Blockstack.io, eMoney Advisor, Finicity, FIS, Funding, Fundings, FutureAdvisor, GoNow, Guide Financial, Kofax, Kontomatik, Kreditech, LearnVest, Mergers & Acquisitions, Q2, ReadyForZero, Red Zebra, Social Money, Stratos, Toopher, Urban FT, Wipit, Yodlee

Handshake_graphic

2015 was another big year for mergers and acquisitions in the fintech industry. And whether they were the acquirer or the acquired, Finovate alums were very much a part of the M&A action.

Because terms of many deals were undisclosed, it is difficult to get a precise number on how much money was spent acquiring some of fintech’s most promising startups this year. But looking just at those acquisitions for which figures were available, we can see that 2015 was a banner year in M&A (more than $7 billion) — and that’s just counting alums.

So from the $5 billion deal between FIS and Sungard to the “alum-acquires-alum” mergers of September 2015, let’s take a closer look at some of the major unions of the year that featured Finovate alums.

December

October

September

August

July

May

April

March

February

January

If you’re a Finovate alum whose merger we’ve missed or acquisition we’ve overlooked, let us know. Send us an email at research@finovate.com.

Share this:

Send Post Twitter LinkedIn Facebook

Finicity Acquires Aurora Financial Systems

Finicity Acquires Aurora Financial Systems
By David Penn Posted on
Categories: Aurora Financial Systems, Finicity, Funding, Mergers & Acquisitions

Aurora_Note_logo_Sep2015As we were about to publish the Finovate debut feature for Aurora Financial Systems, we were asked to hold off by Chris Melendez, vice president for corporate partnerships. “There may be some big news coming,” he said.

Finicity_logo_FinDEVr2015This week, the big news arrived: Aurora Financial Systems has agreed to be acquired by fellow Finovate alum, Finicity.

In a statement released earlier this week, Finicity announced it had acquired “substantially all the assets” of Aurora Financial Systems. Aurora will become part of Finicity’s Data Services Division and will be led by Melendez and Aurora co-founder Michael Ciberey. The terms of the acquisition were not disclosed.

A division of Finicity Corporation, Finicity Data Services provides API services for fintech developers building account aggregation, cash-flow verification, and account-ownership-verification solutions. With the acquisition of Aurora Financial Systems, Finicity will add transaction processing and card program management to its developer stack.

With the acquisition, Finicity is intensifying its promotion of its TxPUSH real-time financial data delivery. Finicity co-founder Nick Thomas highlighted Aurora’s TxPUSH Event Management API and Event PUSH Delivery engine as “standards-based solutions” for delivering card transaction data “immediately, not three days from now.”

“Real-time transaction data opens many new doors for fintech innovators,” Thomas said.

FinDEVr2015LogoV2DateFounded in 1999 and headquartered in Salt Lake City, Utah, Finicity’s Data Services division launched its TxPUSH API for fintech apps at FinovateSpring 2015. The company will make its FinDEVr debut next month at FinDEVr 2015 San Francisco (early bird ticket sales end this Friday) where it will demonstrate real-time data delivery via its TxPUSH API.

Aurora Financial Systems made its Finovate debut at FinovateSpring 2015 in San Jose, Calif., with the debut of Note, a vertically integrated budgeting solution for FIs. But the Purchase, New York-based company’s pedigree is as a debit processor and program manager specializing in incentive, payroll, and reloadable, prepaid solutions. Aurora has processed millions of dollars of transactions within these categories since its founding in 2009.

Share this:

Send Post Twitter LinkedIn Facebook

Early Warning Acquires Authentify

Early Warning Acquires Authentify
By Julie Muhn (@julieschicktanz) Posted on
Categories: Authentify, Mergers & Acquisitions, Payfone

EWSAuthentifyAcquisition

Authentify, a company that offers phone-based, multifactor authentication to more than 1,200 financial institutions and e-commerce companies, today announced it will soon be acquired.

The acquirer is Chicago-based Early Warning, a company owned and governed by the largest banks in the U.S. and which provides risk-management solutions to 1,100 banks, government entities, and companies. Once the Authentify acquisition is under its belt, Early Warning will bolster its current offering with a multifactor authentication solution that integrates multiple channels and authentication methods.

The terms of the acquisition were not disclosed.

AuthentifyHomepage

This is not Early Warning’s first move to broaden its offerings. In 2013, the Arizona-based company partnered with Payfone to combine device and customer-identity authentication with transaction data to ensure security. Early Warning has an equity stake in Payfone.

Authentify was founded in 1999 and Peter Tapling is CEO. The company demonstrated 2CHK at FinovateFall 2011.

Share this:

Send Post Twitter LinkedIn Facebook

Printer Giant Lexmark to Acquire Kofax for $1 Billion

Printer Giant Lexmark to Acquire Kofax for $1 Billion
By Julie Muhn (@julieschicktanz) Posted on
Categories: Kofax, Mergers & Acquisitions

KofaxHomepage

Kofax creates mobile and web solutions made to simplify customer interactions. The California-based company announced today it has been acquired by Kentucky-based Lexmark International, a global corporation with approximately $3.8 billion in revenue.

Kofax’s Board of Directors, which accounts for 25% of the company’s shareholders, unanimously voted in favor of the merger. Lexmark will pay $11 per share in cash for all outstanding shares of Kofax, for a total value of $1 billion (net of cash acquired).

Lexmark is well-known for its hardware, such as printers, copiers, and fax machines. The company also distributes document imaging and electronic form software, under the brand Perceptive Software, that competes with Kofax’s offerings. Scott Coons, Perceptive Software president and CEO and Lexmark VP states:

“The combination of Perceptive Software and Kofax solutions strengthens the breadth and depth of our offering, giving us an… ability to help customers… connect unstructured information to their systems of record.”

Additionally, Lexmark anticipates the acquisition will expand its reach to mid-market business customers. Kofax has 20,000 customers and 850 channel partners across the globe.

LexmarkHomepage

When the acquisition closes in Q2 of 2015, Lexmark will double the size of the software branch of its business.

Kofax was founded in 1985. Reynolds Bish is CEO. The company last demoed at FinovateSpring 2014 where it debuted its Mobile Capture Platform. Kofax won Best of Show at FinovateAsia 2013 in Singapore.

Share this:

Send Post Twitter LinkedIn Facebook

Fintech Unicorns

By Jim Bruene Posted on
Categories: Mergers & Acquisitions

Gilt statue of a unicorn on the Council House,...

Gilt statue of a unicorn on the Council House, Bristol (Photo credit: Wikipedia)

In January, we identified the billion-dollar fintech unicorns (post), but William Mougayar went deeper looking at the tech companies founded since 2000 valued at $250 million or more. He compiled a list of 235 companies around the globe. Seventeen of those (7%) we consider fintech (15 if you don’t count real estate specialists Zillow and Trulia). The list is not yet complete (more companies are being added by readers), but it’s an interesting data point.

Highlights:

  • Square has been the alpha unicorn (oxymoron?) since it burst on the scene five years ago. But it looks like Lending Club is closing the gap, valued at, $3.8 billion, just (!) $1.2 billion less. However, the peer lender seems to be on the rise and headed to an IPO, while media reports indicate Square may be struggling a bit to maintain its valuation and has scuttled its own IPO plans for this year.  
  • This is the first time we’ve seen Paydiant mentioned in the billion-dollar club, but we are not surprised.
  • Of the still-private companies listed here, all but two are Finovate alums (note 1). 

Table: Fintech companies valued at $250 mil or more (founded 2000 or later)

Company Finovate Alum? Founded Valuation
Square No 2009 $5.0 bil
Lending Club Yes 2006 $3.8 bil
Zillow No 2005 $3.8 bil (public)
Xero Yes 2006 $3.5 bil (public)
Klarna Yes 2005 $2.5 bil
Wonga Yes 2007 $2.0 bil
Stripe No 2011 $1.8 bil
LifeLock No 2005 $1.5 bil (public)
Trulia No 2004 $1.2 bil (public)
Paydiant Yes 2010 $1.0 bil
Climate Corp No 2006 $930 mil (acquired)
Braintree (Paypal) Yes 2007 $800 mil (acquired)
BazaarVoice Yes 2005 $540 mil
Cardlytics Yes 2008 $500 mil
Payfone Yes 2008 $500 mil
Prosper Yes 2006 $500 mil
Vitrue No 2006 $300 mil (acquired)

Source: StartupManagement.org (link), 20 April 2014

—————————————-

Note:
1. Come see the latest unicorn candidates at FinovateSpring next week (29 & 30 April 2014) in Silicon Valley.

Share this:

Send Post Twitter LinkedIn Facebook

Fintech Four: Banno, Borro, Personetics & Auction.com are on a Roll

By Jim Bruene Posted on
Categories: Loans & Credit, Mergers & Acquisitions, Personal Financial Management, Real Estate

It’s been a crazy week in fintech, and it’s only Wednesday morning. Because my brain can hold no more than four stories at a time (and that’s a stretch), it’s time to publish a “fintech four” mid-week. I don’t know which of these is more dramatic, so I’ll go in alphabetic order: 

1. Auction.com joins the billion-dollar fintech club

Thumbnail image for auction.jpgI’m not sure everyone considers Auction.com a fintech play, but as an online asset sales platform (which moved $7 billion last year), it’s close enough for me. It just raised a fresh $50 million from Google Ventures at a valuation of $1.2 billion. So I’ll be adding Auction.com to our “Fintech billion-dollar club.” 

>>> Metrics and more from Bloomberg here.

2. Banno acquired by Jack Henry

banno.jpgWhile we don’t know the $$ number, given the traction Finovate alum Banno had in the market (375 bank clients), and the relatively high valuations in the fintech space these days ($1.75 billion for Stripe), this must have been a pretty nice payday for the owners and investors in Iowa-based Banno (formerly T8 Webware). Founder Wade Arnold is staying on at Jack Henry and is super excited about his future with the Kansas City-based technology vendor. 
English: Wordmark of Borro, the characters &qu...

3. Borro borrows $112 million

In one of the biggest fundraising rounds in fintech history, U.K.-based Borro landed $112 million to further its high-end online pawn brokerage business. I met founder Paul Aitken last fall and was impressed with the product, which allows consumers to borrow against non-liquid assets, say, a Jacob Lawrence in the hall, at pretty high rates (3% to 4% per month). Until then, I had no idea there was a large, underserved (near prime?) market holding high-end assets (outside Downton Abbey anyway). Even so, I was shocked to see a $112 million round. While terms of the deal weren’t disclosed, I have to believe all or part of the money is debt, not equity. So I’m not going to add Borro to the billion-dollar club, yet. Apparently online lending is back! 

>>> Average loan amount = $12k (against a $20k value)… see Press release
>>> TechCrunch breaks down the Borro loan process and metrics here

4. Personetics is on a roll

pesonetics.jpgAt this week’s great Bank Innovation event in Seattle, I finally had a chance to meet face-to-face with Personetics, the Sequoia-backed “predictive financial services engine.” I’ve been impressed with what I’ve read about the company, and loved the Fiserv demo at FinovateEurope last month (demo here) featuring a forward-looking PFM piece powered by Personetics. But I had no idea how much traction the company was gaining in less than three years since its A-round. While I can’t name names, if even one of these deals moves into production, it has the potential to change the face of online banking. 
>>> Fiserv demo at FinovateEurope featuring insights powered by Personetics here (12 Feb 2014)

Share this:

Send Post Twitter LinkedIn Facebook