A Quick Review on Some of The Biggest Global Fintech Mergers & Acquisitions
Mergers and acquisitions are a good way to leave behind the competition and make your way up the success ladder. A merger happens when two companies are combined to form a single new entity, while acquisition is an event when one business acquires another business under its umbrella, to strengthen the market position. Mergers and acquisitions between companies is an act of consolidating assets with a shared goal of stimulating growth, acquiring greater market share, getting an edge over the competitors, and earning greater profits.
Evolution of the Fintech Industry
The traditional financial services sector has been disrupted by the emergence of the Financial Technology (FinTech) sector. FinTech has not only revolutionized the way financial institutions operate, but it has also changed the way in which people interact with them. It has ushered in several changes and new digital channels for financial transactions, back-end operations, etc. With the advent of technology and increased usage of personal, smart devices, the channels of interaction between financial institutions and their customers have also changed significantly, and for the better. Some of the major changes introduced by the integration of technology in the financial services sector are online payment applications, biometrics, security protocols, artificial intelligence, blockchain, machine learning, etc.
Biggest Global Fintech Mergers
According to a global fintech report produced by PWC, 56% of the financial institutions have planned their corporate strategies keeping digital disruption in mind. As a result, nearly 82 percent of those companies are expected to increase Fintech partnerships between 2018 and 2023. Let us now look at some major mergers and acquisitions in the Fintech sector from recent times:
Worldpay acquired by Fidelity National Information Services (FIS)
Fidelity National Information Services (FIS), a Fintech firm, announced and completed its acquisition of Worldpay for US$ 35 billion in July 2019. Worldpay is a leading name when it comes to payment processing services provider. After acquiring Worldpay, Fidelity National Information Services now seeks to explore three new market divisions by combining the strength of all its subsidiaries.
Merger of Fiserv and First Data
Fiserv is a US fintech provider. It completed its merger of US $22 billion with First Data in July 2019. Fiserv is a back-end processing service provider for bank and credit societies. First Data is a leader in the domain of point of sale transactions. Fiserv is a back-end service provider for credit societies and banks. With this merger, Fiserv has become capable of providing end to end solutions in the domain of payments. It has made FinServ one of the largest service platforms in the world.
Total system services and Global systems merger
Global payments are payment technology and software solution providers. It merged in September 2019 with Total system services, which is a provider of payment processing services. This merger deal between Total system services and Global systems manager was a merger deal worth US $21.5 billion. It helped expose Global systems in more than 50 world markets.
Intuit acquires Credit Karma
Intuit is an accounting, tax filling software provider that is behind software solutions like QuickBooks, Turbo, and Mint. Credit Karma was acquired by Intuit for US $7.1 billion. Credit Karma is a fintech start-up which has more than 100 million registered users. The users shop for credit cards, new loans, and avail services to file for their taxes and check their credit scores. It is Intuit’s biggest acquisition to date.
Plaid facilitates its users by connecting their apps and financial accounts. This makes it possible for users to share their financial information with other apps and services. It was acquired by Visa in January 2020 for US $5.3 billion. It opened up many ventures of new businesses for Visa.
D+H getting acquired by Vista Equity partners
D+H is a fintech provider that was acquired by Vista Equity Partners in June 2017 for US $ 4.8 billion. It combined D+H with a leading global software provider named Misys. It enabled Vista Equity to become a fintech market leader with a global presence and the most diverse financial solution provider.
Ellie Mae acquired by Thoma Bravo
Thoma Bravo is a private equity firm that acquired a cloud-based platform provider for mortgages named Ellie Mae in April 2019 for US $3.7 billion. It provides services like getting easier loans with reduced costs and faster procedures.
Master Card and Nets Group
Master card purchased the real-time payment unit of Denmark based Nets Group in August 2019 worth US $3.2 billion, making it the biggest acquisition yet by Master Card. It enabled MasterCard to have a robust real-time payment infrastructure in bank accounts across Europe.
iZettle acquired by PayPal
iZettle is a Swedish mobile payments fintech start-up which was acquired by PayPal in September 2018 worth the US $2.2 billion. iZettle provides services like the point of sales applications, funding, and payment services. It enabled PayPal to accelerate its growth and provide a hassle-free commerce experience for its users.
eFront acquired by BlackRock
BlackRock is a leader in the market when it comes to asset management. It acquired eFront, which is an investment management software in May 2019 for the US $1.3 billion. It combined this firm with Aladdin, which is a portfolio management software solution provided by BlackRock. It enables Aladdin to provide a complete portfolio technology management software solution to the users.
By forming such strategic partnerships with organizations that are experts in their respective fields, these firms are driving the digital transformation of the financial industry.
Financial institutions are now aware that they do not need to depend on the internal IT services provided by their departments solely. Now that the growth in financial services has been accelerated increasingly through mergers and acquisitions, global financial institutions have been increasingly accepting as well as embracing the digital disruptions which has come along with the emergence of Fintech.