With 2022 more than halfway finished, it has been a mixed year. Wars, rising cost of living, interest rate hikes, supply chain issues and multiple extreme weather conditions. There has been a lot to cope with.
All of these are having a major influence on the global financial market and things are not looking great. FinTech Global recently spoke to several industry players about the current market and whether FinTech companies should be worried. The consensus was that FinTech companies should be concerned, but the FinTech sector is not in as much trouble as others. People will always need access to financial services.
Testament to the FinTech sector remaining important, in the first half of 2022 $76.8bn was invested across 3,447 deals, according to data from FinTech Global. The sector leading the charge is blockchain and cryptocurrency, accounting for 20% of the deals, followed by WealthTech with 15%.
Not only have there been some major investment rounds, but there have also been some sizable acquisitions this year. However, not all deals eventually get completed. Earlier this week, Galaxy Digital and BitGo showed the issues of a deal falling through.
Galaxy Digital, which provides institutions, startups and qualified individuals with access to crypto, announced it was terminating its $1.2bn merger agreement with BitGo, a digital asset custody, trading and financing platform. Galaxy claimed the reason for dropping the deal was due to BitGo failing to present its audited financial statements for the year of 2021, which was part of the agreement details.
BitGo responded to this and is seeking $100m in damages and to “hold Galaxy legally accountable” for what it describes as an improper decision to terminate the agreement.
That set aside, here are some of the biggest acquisitions to happen in 2022, so far.
SentinelOne acquires fellow CyberTech platform Attivo Networks
Autonomous AI endpoint security platform SentinelOne recently announced its plan to acquire Attivo Networks for $616m. Attivo offers identity detection and response services for cyberattacks.
The cash-and-stock deal gives SentinelOne a fresh suite of capabilities that will help its move to become a full-service player in the extended detection and response market.
The firm said in a statement, “With this acquisition, SentinelOne extends its AI-powered prevention, detection, and response capabilities to identity-based threats, setting the standard for XDR and accelerating enterprise zero trust adoption.
“[This extends our] XDR capabilities to identity-based threats across endpoint, cloud workloads, IoT devices, mobile, and data wherever it resides.”
Technisys acquires SoFi to expand banking capabilities
This all-stock deal is equivalent to roughly 10% of SoFi’s market value. The deal gives SoFi control of Technisys’ core banking platform, which is the back-end technology that banks use to power mobile banking apps, open accounts and keep track of customer deposits.
SoFi plans to leverage the Technisys platform to roll out personalised financial services to its banking customers. It will also allow other banks and FinTech companies to use the platform, which is currently predominantly used by banks in Latin America.
The company expects the acquisition to generate up to $800m in additional revenue through 2025. It will also create up to $85m in cost savings over this time.
SoFi currently relies on a legacy software vendor, but this deal will enable it to bring the capabilities in-house.
Bolt buys Wyre to expand crypto
Checkout and shopper network Bolt has agreed to acquire cryptocurrency infrastructure provider Wyre.
The deal, which was reportedly valued at $1.5bn, will support the creation of commerce solutions for mainstream, secure cryptocurrency usage for millions of shoppers, retailers and developers.
This acquisition will enable Bolt to bring its one-click checkout, authentication, payments and fraud protection services to the cryptocurrency ecosystem. Other benefits of the acquisition include the ability to buy NFTs through Bolt, access to cryptos, fiat exchanges and compliance solutions on Bolt’s network and the ability for retailers to accept crypto.
By working together, the companies plan to democratise commerce by uniting their technology to simplify digital shopping. Wyre’s APIs will enable simple and secure crypto to fiat experiences and reduce the barrier to entry faced by developers and partners.
The companies plan to be fully integrated by the end of the year.
Bolt CEO Maju Kuruvilla said, “This acquisition will pave the way for seamless, secure crypto transactions, and NFT enablement for our retailers. Both consumers and retailers will benefit from a friction-free buying experience that supports crypto and NFT natively. We’re also proud to bring Wyre’s unparalleled team and its advanced crypto stack into the Bolt ecosystem, and we’re excited about our joint mission of bringing crypto mainstream.”
Global Payments acquires fellow PayTech EVO Payments
Global Payments, which develops global payment technology, recently announced plans to acquire fellow PayTech solution developer Evo.
The $4bn deal sees Global Payments acquire EVO’s shares at a price of $34 apiece, which is approximately a 24% and 40% premium on its closing price and 60-day average price, respectively.
With the acquisition, Global Payments hopes it can increase its addressable markets, enhance its leadership, expand its presence in new and existing geographies and augment its B2B software and payment solutions with accounts receivable software with broad third-party acceptance.
The company will finance the deal with cash on hand and a committed bank facility. Silver Lake will also make a strategic investment of $1.5bn into Global Payments as a convertible note.
Global Payments president and chief operating officer Cameron Bready said, “The acquisition of EVO is highly complementary to our technology-enabled strategy and provides meaningful opportunities to increase scale in our business globally.
“Together with EVO, we are positioned to deliver an unparalleled suite of distinctive software and payment solutions to our combined 4.5 million merchant locations and more than 1,500 financial institutions worldwide.”
The FinTech company also plans to grow its footprint into Poland, Germany, Chile and Greece, whilst expanding in the US, Canada, Mexico, Spain, Ireland and the UK.
Investment bank UBS buys Wealthfront
A high-profile acquisition this year was investment bank UBS’ $1.4bn all-cash deal for automated wealth management provider Wealthfront.
This acquisition was made to help UBS accelerate its growth ambitions in the US, broaden its reach among affluent investors, and expand its distribution capabilities.
Wealthfront, which is primarily focused on millennial and Gen Z investors, helps users access financial planning capabilities, banking services and investment management solutions. It currently has $27bn assets under management and over 470,000 clients in the US.
With UBS looking to build relations with the affluent investor market, Wealthfront will become the foundation of its digital offering, which will also include remote human advice.
The deal will also help UBS expand its existing offering through the use of Wealth Advice Centre, which focuses on serving core affluent clients and the Workplace Wealth Solutions, which works with employees of corporate clients on equity plan participation, financial education and retirement programs.
Wealthfront will become a wholly owned subsidiary of UBS and operate within UBS Global Wealth Management Americas.
This is not UBs’ first foray into digital wealth management, having previously run SmartWealth, which was closed down in 2018.
FinTech Global spoke with several players in the market about their thoughts on the UBS acquisition. Read that here.
Fiserv acquires Finxact to boost its digital bank strategy
Fiserv, a developer of payments and banking solutions, acquired Finxact in a $650m deal.
The deal will help Fiserv advance its digital bank strategy, expand its account processing, digital and payments solutions, and bolster its position in the market. It also hopes to accelerate and expand its digital banking experiences for its customers.
It also hopes Finxact will bring domain expertise and a transformative approach to help Fiserv introduce ‘innovative paradigms’ in open banking and FinTech integrations. With this, clients will be able to improve the agility of their digital banking operations and sustainability reduce time to market for new customer experiences.
Fiserv CEO and president Frank Bisignano said, “We’re accelerating the delivery of innovative digital banking experiences for our clients and elevating their ability to compete in a rapidly changing market.
“This transaction complements our Fiserv account processing solutions and expands our opportunities to serve clients by bringing together Finxact’s highly flexible and scalable API-first capabilities with the comprehensive digital financial solutions portfolio and expertise of Fiserv.
Want some more acquisition action? Here are the top deals from 2021.
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