Illimity, Fabrick joint venture in HYPE

By Robin Amlot

illimity, a digital bank founded in 2018 in Italy by Corrado Passera, former Minister for Economic Development, and Banca Sella, one of the oldest family owned banks in the country, have announced a joint venture to take control of HYPE, the biggest open banking platform in Italy. Worth around €140 million, the deal is unique in the Italian banking landscape, with two banks joining forces to invest in the FinTech sector. This is the first consolidation in open banking in Italy.

illimity will acquire a 50% shareholding in HYPE’s share capital from Fabrick (part of the Sella Group and current 100% shareholder in HYPE to be carried out via a series of corporate transactions entailing the contribution of a branch of illimity’s business related to its open banking project (with no changes in strategy and targets of illimitybank.com), the underwriting of a share capital increase for HYPE to be paid in cash for a consideration of €30 million and the issuance of new ordinary illimity shares in a 7.5% share capital increase of illimity reserved to Fabrick for a consideration of approximately €45 million. An earn-out to be paid in illimity’s shares is also set, with further issuance of ordinary shares equal to around 2.5% of illimity’s share capital subject to the achievement by HYPE of certain profitability targets in 2023-2024.

Corrado Passera, Founder and CEO of illimity, said: “The digital financial services world is evolving fast. Technology, user experience, economies of scale and, above all, how quickly they can be achieved, are crucial success factors. Just as in the direct digital banking segment, illimity has strongly innovated and will continue to do so by expanding its field of action, in the non-banking segment we were delighted to take this opportunity to partner with the Italian leader to become a true industry benchmark. We are already closely linked to the Sella Group by technological collaboration and we are particularly pleased that it has decided to consolidate a long-term relationship between us also through an investment in illimity share capital.”

HYPE’s net profit targets, based on the initiatives currently foreseen, are for €3.5 million in 2023 and €17 million in 2025. Antonio Valitutti, current CEO of HYPE, will lead the venture. Carlo Panella, Head of the Direct Bank Division of illimity, will take the position of Chairman.

Among the synergies seen in the deal, from a technology perspective, a common evolutionary vision, key components of the shared open banking systems (Fabrick), the use of the same modern core banking system (Centrico), as well as the similar architectural design of the two platforms illimitybank.com and HYPE in both banking and non-financial products, will ensure that integration is more immediate than is generally the case in this type of deal.