Fintech startups are disrupting traditional financial institutions as consumers rely more and more on technology for everyday activities, including banking. Robust M&A activity is expected to continue in this space. It’s not only banks and credit unions that are acquiring or investing in fintechs, established technology firms like Amazon are snapping up these startups in order to expand into digital payments, and other financial services.
Here’s a roundup of a few interesting fintech deals from just the first few weeks of 2019.
- Plaid buys Quova for $200 million. Both Plaid and Quova make software platforms that connect banks with fintech apps. Plaid’s customers include Venmo and Robinhood; Quova’s customers include SoFi, Stifel, Vanguard, Empower Retirement, and John Hancock. The acquisition will “enable a digitally-delivered financial system…that gives consumers convenience and control across their financial assets,” says Plaid.
- London’s Meninga buys Swedish fintech company Wrapp to expand into the Nordic region.With this transaction, Meniga, a provider of digital banking technology expects to add EUR 3 million in annual recurring revenues with this transaction.
- Payments provider Elavon, a subsidiary of US Bancorp, purchases integrated payment software provider CenPOS. The acquisition will expand Elavon’s reach in the automotive, travel, and entertainment industries.
- Accenture buys Orbium to expand into the private banking and wealth management market. Orbium is a fintech consulting firm and the largest services provider for the Avaloq Banking Suite, a digital and core banking software for wealth management and banks.
- Fiserv to purchase payment processor First Data for $22 billion in all stock deal. The acquisition is one of the largest in fintech and will enhance Fiserv’s end-to-end services for financial clients.
While many of these deals may be smaller in value, they indicate an appetite for strategic fintech acquisitions in 2019. According to a Mergermarket study, 94% of financial institutions are planning two or more fintech acquisitions this year. Established players like banks and credit unions must either develop their own innovations or partner with or acquire fintechs to gain the technology needed to stay relevant in today’s market. Watch out for more fintech deals in the near future!