Top FinTech mergers & acquisitions in 2021

During a time of greater market consolidation, FinTech Global takes a look back at some of 2021’s most notable mergers and acquisitions (M&A).

Coming off the back of a tough year, fresh funding records were reached in FinTech in 2021. The UK, for example, reached £9.6bn of investment in the first three quarters of the year, an increase of 92% from 2020.

As companies seek to accelerate the pace of digitalisation and provide for more demanding consumers in a highly competitive landscape, the FinTech industry is seeing plenty of M&A activity.

Square buys Afterpay in $29bn deal

Twitter co-founder Jack Dorsey’s digital payments platform Square acquired the Australian Buy Now, Pay Later (BNPL) firm Afterpay in Australia’s biggest ever buyout.

The acquisition, which is expected to close the first quarter of 2022 subject to closing conditions, would bring together two fast-growing FinTechs to create an online payments powerhouse.

The take-over came at a time of an ongoing Buy Now, Pay Later boom in which many online payment players and FinTechs are competing to launch their own BNPL products.

Jack Dorsey, co-founder and CEO of Square, said: “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands.”

Paypal buys Paidy for $2.7bn

Another acquisition in the BNPL space, PayPal announced it was acquiring Japanese BNPL firm Paidy for $2.7bn in cash as it looked to expand its foothold in the country, which reportedly boasts the third largest e-commerce market in the world.

Paidy offers a BNPL service that does not require a credit card. It is one of the few unlisted startups in Japan with a market capitalisation of over $1bn.

Paidy’s payment services allow Japanese shoppers to make purchases online, and then pay for them each month in a consolidated bill at a convenience store or via bank transfer. The company uses proprietary technology to score creditworthiness, underwrite transactions and guarantee payment to merchants.

Paypal snaps up Israel-based Curv 

Earlier in the year, Paypal also agreed to acquire provider of cloud-based infrastructure for digital asset security Curv, to expand its initiatives to support cryptocurrencies and digital assets. The financial terms of the deal were not disclosed.

Itay Malinger, Curv’s CEO, said that as the adoption of digital assets accelerates, “there’s no better home than PayPal to continue our journey of innovation.”

Visa to capture open banking platform Tink

Visa entered into a definitive agreement to acquire Tink for $2bn. Tink enables financial institutions, FinTechs and merchants to build tailored financial management tools, products and services for European consumers and businesses based on their financial data.

Tink is integrated with more than 3,400 banks and financial institutions, reaching millions of bank customers across Europe.

The combination of Visa’s infrastructure and Tink’s API, technology and customer relationships, will help accelerate the adoption of open banking in Europe, Visa said in a statement at the time.

Visa closes Currencycloud deal

Toward the end of the year, Visa also finalised the acquisition of cross-border payment firm Currencycloud in a £700m deal.

According to Visa, the acquisition would help it strengthen its foreign exchange capabilities by extending them to better serve financial institutions, FinTechs and partners while enabling new use cases and payment flows.

The deal came after a strong 2021 for Currencycloud, which has grown its team to almost 500 employees and processes more than $5bn in cross-border transactions per month.

Lemonade in Metromile take-over for car insurance

Lemonade entered into an agreement to acquire US-based digital Metromile towards the end of the year, in a transaction worth approximately $500m.

Lemonade deploys AI to offer renters, homeowners, pet, car, and life insurance. While Metromile offers real-time, personalised car insurance policies by the mile.

Under the terms of the transaction, Metromile shareholders would receive Lemonde common shares at a ratio of 19:1. The acquisition later came under scrutiny for this. Global investor rights law firm Halper Sadeh launched an investigation into whether the sale would be fair to Metromile shareholders and to determine whether Lemonade is underpaying for Metromile.

The outcome of the investigation will likely become clear in the second quarter of 2022 when the transaction is expected to close.

Mastercard and open banking technology developer Aiia

Mastercard acquired Aiia, an open banking platform that includes a selection of APIs to help companies improve their use of data. Clients can connect with over 2,900 European banks to access financial data and enable streamlined payments.

By incorporating Aiia’s technology, Mastercard was looking to bolster its open banking efforts and help FinTechs and financial institutions continue innovation and improving their services.

The company’s chief product officer Craig Vosburg said, “As open banking continues to ignite innovation, we’re committed to providing a unique set of technology platforms, data connectivity and infrastructure combined with data privacy and security principles.”

McAfee Enterprise and FireEye Products merge

McAfee Enterprise and FireEye Products entered a deal to merge into a single company that will have a revenue of almost $2bn. The combined organisation has more than 40,000 customers and 5,000 employees.

According to a report from Dark Reading, the two companies have some overlap in their current cloud security product offerings, and each has its own security information and event management platforms.

The deal comes following the recent closure of Symphony Technology’s acquisition of FireEye. FireEye subsequently rebranded as Mandiant when the plan came into effect.

Prosus snaps up BillDesk in $4.7bn deal

The global consumer internet group entered into the deal with payments FinTech PayU to acquire online payment gateway provider BillDesk for $4.7bn.

The proposed acquisition would see PayU, the payments and FinTech business of Prosus that operates in more than 20 markets, become one of the leading online payment providers globally by total payment volume (TPV), the company said.

MN Srinivasu, co-founder of BillDesk, said, “BillDesk has been a pioneer in driving digital payments in India for well over a decade. This investment by Prosus validates the significant opportunity in India for digital payments that is being propelled by innovation and the progressive regulatory framework put into place by the RBI.”

Bill.com acquires Divvy for $2.5bn

Cloud-based financial operations management platform Bill.com acquired the spend management unicorn Divvy in a stock and cash deal.

Through the combined solution, businesses will be able to automatically manage accounts payable, accounts receivable and corporate card spend all in a single location. With real-time insight into their B2B spending and access to multiple payment solutions, clients will be able to spend smarter, manage budgets and cash flow, and simplify back-office operations.

The combined company will have an expanded market opportunity, with it now boasting a customer base of over 115,000 and a network of 2.5 million members, it claims.

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