FinTech Mergers & Acquisitions (America): May 2021

By Pavithra R

Mergers and Acquisitions (M&A) is the sector which is highly elastic in its behavior. Successfully acquiring and integrating FinTech companies poses a major challenge.  The article lists 5 selected FinTech M&A announcements made in May.

Bill.com – Divvy

Bill.com, a leading provider of cloud-based software that simplifies, digitizes, and automates complex, back-office financial operations for small and midsize businesses (SMBs) has announced entering into a definitive agreement to acquire Divvy in a stock and cash transaction valued at approximately $2.5 bn.

Founded in 2016, Divvy is a leader in spend management that modernizes finance for business by combining expense management software and smart corporate cards into a single platform. The firm in January raised $165 mn in Series D funding round bringing its valuation to $1.6 bn.

The acquisition supports Bill.com’s mission and enhances its ability to deliver value to the combined customer base. The firm’s expanded solution will enable businesses to automatically manage accounts payable (AP), accounts receivable (AR), and corporate card spend all in one place, saving them time and money. With real-time insight into all their B2B spending and access to multiple payment solutions, businesses will be empowered to spend smarter, better manage their budgets and cash flow, and simplify their back-office financial operations. The combination is expected to expand the market opportunity for both companies.

REPAY – BillingTree

Repay Holdings Corporation, a provider of a comprehensive suite of advanced and integrated payment technology products has announced signing a definitive agreement to acquire BillingTree for approximately $503 mn.

The acquisition will be financed with approximately $275 mn in cash from REPAY’s balance sheet and $228 mn in newly issued shares of REPAY Class A common stock to be issued to the seller. The transaction is subject to customary closing conditions and is expected to close by the end of the second quarter of 2021.

Founded in 2003, BillingTree is a leading provider of omnichannel, integrated payments solutions to the Healthcare, Credit Union, Accounts Receivable Management (ARM), and Energy industries. Through the FinTech’s technology-enabled suite of products and services, including various payment channels and reporting capabilities, BillingTree helps organizations get paid faster and more efficiently. The acquisition expects to expand REPAY’s footprint and provider-of-choice positioning in healthcare, Credit Unions, and Accounts Receivable management.

Stripe – Bouncer 

Stripe, a provider of economic infrastructure for the internet, has announced the acquisition of Bouncer, a company building card authentication technology to reduce fraud during online transactions.

Under the deal, Bouncer’s team and technology will join Stripe to further enhance the capabilities of Radar, Stripe’s powerful, machine-learning-based fraud prevention tool. Bouncer will be integrated into Stripe Radar, which is fully integrated into Stripe’s payments platform. When it identifies a specific transaction as high risk, Radar will use Bouncer’s card scanning and verification technology to confirm that an end customer has a legitimate card in their hands at the time of the purchase. This extra layer of protection is expected to reduce false positives among potentially high-risk transactions.

Docupace – jaccomo

Docupace, the leader in cloud-based fintech digital operations software for the wealth management industry has announced expanding its back-office platform with the acquisition of jaccomo, a premier compliance, data integration, financial reporting, and advisor compensation accounting system.

Established in 2002, Docupace is a leading digital operations technology provider that simplifies how wealth management firms process and digitizes data, increasing efficiency, productivity, and profits. Through the acquisition, the firm will integrate jaccomo’s data-centric capabilities with its platform’s powerful automation, workflow and digital processing tools to create a centralized source for execution excellence within the wealth management industry.

Sift – Chargeback

Sift, a leading Digital Trust & Safety provider, has announced entering into a definitive agreement to acquire Chargeback, a pioneer in real-time dispute management for merchants. 

Through the addition of Chargeback to Sift’s platform, merchants will gain access to a complete solution that addresses risk before, during, and after user transactions. Specifically, the two companies prevent both “true” fraud, which occurs when stolen credentials or payment information is used to make purchases, as well as “friendly” fraud, which occurs when consumers make false chargeback claims to their payment providers.

Chargeback’s pre-built connector within the Sift Connect integration hub adds to the rich data from integrations with leading payment service providers (PSPs) already available in the Sift App Gallery.

Also, read: Applications of Artificial Intelligence In Banking 2021