FinTech Mergers & Acquisitions (America): June 2021

By Pavithra R

Mergers and Acquisitions (M&A) is a sector that is highly elastic in its behaviour. Successfully acquiring and integrating FinTech companies poses a major challenge.  The article lists selected FinTech M&A announcements made in June.

Banco BS2 – WEEL 

BS2 Bank, aiming to become the first B2B neobank in Brazil, has announced the acquisition of the fintech WEEL, a B2B online lender focused on financing Brazilian companies.

Founded in 2015, WEEL is a data and credit fintech that specializes in solutions for small and medium-sized companies. The company uses machine-learning (ML) technology to create optimized credit solutions for SMEs. In 2020, the firm reached the milestone of R$ 1 bn in deployed credit operations and has more than 15 thousand customers in its database.

Through the acquisition, Weel’s cutting-edge technology will be incorporated into BS2, including its origination platform, data and machine learning systems, which will allow the delivery of a unique digital experience for companies, faster user journeys, and more innovative products and services.

Credijusto – Banco Finterra

Mexican FinTech Credijusto, a leading technology-enabled small business lender, has announced the acquisition of Banco Finterra, a Mexico City-based bank that specializes in financing solutions for small businesses and the agriculture sector.

The announcement makes Credijusto the first Mexican fintech to acquire a regulated bank, and becoming the only neobank in Latin America focused on serving small and medium-sized enterprises (SMEs). The company’s expansion reflects a global trend of fintech firms acquiring regulated banks to enable more diversified product offerings. The acquisition doubles the size of its business and accelerates Credijusto’s growth.

With the addition of Banco Finterra, Credijusto is positioned to become the largest financial services provider to small businesses in Mexico as well as the leader in cross-border banking solutions between the U.S. and Mexico. The combined businesses have lent over $2 bn to underserved SMEs.

J.P. Morgan – OpenInvest

J.P. Morgan has announced entering into an agreement to acquire OpenInvest, a leading FinTech company that helps financial professionals customize and report on values-based investments.

Founded in 2015, OpenInvest is a YCombinator and Andreessen Horowitz-backed startup powering the post-fund future. It was built with a core focus on helping advisors unlock the true impact of their clients’ investments. The firm offer premium ESG investing products that reflect the impact of clients’ investments.

Under the agreement, OpenInvest will continue to retain its own brand and be integrated into J.P. Morgan’s Private Bank and Wealth Management client offerings. The terms of the deal were not disclosed.

Valley Strong Credit Union – Solano First Federal Credit Union

Valley Strong Credit Union and Solano First Federal Credit Union have announced entering into a merger agreement and has received regulatory approval as well as approval by majority vote of the Solano First Membership.

The merger represents a partnership between two organizations committed to Members and the communities they serve. Under the agreement, Solano First will become a division of Valley Strong. Both organizations will continue to serve its respective Members “business as usual” at their branch locations as they ramp up efforts to work on Solano First being fully integrated from a systems perspective in early October.

Dave – VPC Impact Acquisition Holdings III

Dave, the banking app on a mission to create financial opportunity that advances America’s collective potential, has announced entering into a definitive agreement for a business combination with VPC Impact Acquisition Holdings III, a special purpose acquisition company sponsored by Victory Park Capital (VPC), that result in Dave becoming a publicly-traded company with an expected pro forma, fully-diluted equity value of approximately $4 bn, assuming no redemptions.

Founded in 2017, Dave is a leading U.S. based challenger bank on a mission to put everyone’s financial mind at ease with free overdraft cash, budgeting and side gigs. The company helping 10 million customers with banking, financial insights, overdraft protection, building credit and finding side gigs. The firm aims to help foster the financial health of its members while also giving back to the community, having pledged over 13 million meals to Feeding America since its launch.

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