By Kshitij Depda Published on : Sep 12, 2022
We are halfway through 2022, and it has been a mix of unexpected events, so far. There has been a lot to cope with wars, rising living costs, interest rate hikes, supply chain problems, and multiple extreme weather events. They significantly impact the global financial market, and things do not look good.
As Mergers and acquisitions for fintech increase in number, it's observed industry experts about the pros and cons of merging a company within the digital ecosystem.
There has been a transformation in the global financial landscape as a result of the digital ecosystem. In the trend of collaboration and partnerships that have emerged during this transformation, mergers and acquisitions have risen considerably.
This is the outcome of several factors. Technology advancement has been a critical factor. Innovations have made great leaps forward post covid in a short time, and global digitalization has been necessary.
Given the costs associated with constructing new technology stacks and all the migration, this tactic is frequently the more inexpensive choice. Increased finance in the fintech industry also makes it possible for mid-sized businesses to acquire breakthrough startups that are revolutionizing the market with their cutting-edge products. Marc Kittenco-founder at Candesic, a strategy consultants firm – says the merger and acquisitions boom is a natural progression of industry growth.
With recent shifts in biotech or the internet, the latest technologies undermine traditional banking and insurance. These include the transition of computing power from mainframes to mobile devices, the cloud/SaaS, big data, ML/AI, and intelligent sensors. Instead of creating them, buying creative people and goods is more readily available, less expensive, quicker, safer, and maybe more significant to financial institutions.
Access to the established player's customer base and infrastructure, especially concerning ever-increasing regulatory and compliance costs.
Additionally, It is a way for owners to cash out, at least partially, in a highly competitive and fast-changing environment."
Marketplace volatility is another reason companies would instead merge than invest in new technologies. It helps them scale and grows, resulting in greater resilience – mainly if uncertainty exists. Since the COVID pandemic, some push and pull are happening in the market constantly. Since M&A may help businesses rationalize, this is a perfect moment to do so. It's an increasingly challenging fundraising period and should continue for the next 12 months. As fintech grows towards working a strategic exit, forces at play also make it a wise time to sell.
Following is a list of the biggest acquisitions that have taken place in 2022 so far.
In a $1.1 billion agreement, US-based SoFi Technologies, which provides banking and personal financial services, will buy Technisys, a banking software provider.
The deal gives SoFi control of the core banking platform used by banks in Latin America and the US. SoFi plans to leverage the Technisys platform to roll out personalized financial services to its banking customers. It is expected that the acquisition will generate additional revenue of up to $800m by 2025. It will also create up to $85m in cost savings.
The supplier of bitcoin infrastructure, Wyre, has agreed to be acquired by checkout and shopper network Bolt. The $1.5 billion acquisition will aid in developing commercial bitcoin use solutions for millions of consumers, merchants, and developers.
Bolt will be able to bring its one-click checkout, authentication, payments, and fraud protection services to the cryptocurrency ecosystem. Furthermore, the acquisition permits NFTs to be purchased through Bolt, cryptos to be traded on Bolt's network, and fiat exchanges and compliance solutions to be available.
By combining their technologies to simplify internet shopping, businesses hope to democratize commerce. Wyre's APIs will make it easier for users to convert cryptocurrency into fiat and lower the entrance barrier for partners and developers.
We are halfway through 2022, and it has been a mix of unexpected events, so far. There has been a lot to cope with wars, rising living costs, interest rate hikes, supply chain problems, and multiple extreme weather events. They significantly impact the global financial market, and things do not look good.
As Mergers and acquisitions for fintech increase in number, it's observed industry experts about the pros and cons of merging a company within the digital ecosystem.
There has been a transformation in the global financial landscape as a result of the digital ecosystem. In the trend of collaboration and partnerships that have emerged during this transformation, mergers and acquisitions have risen considerably.
This is the outcome of several factors. Technology advancement has been a critical factor. Innovations have made great leaps forward post covid in a short time, and global digitalization has been necessary.
Given the costs associated with constructing new technology stacks and all the migration, this tactic is frequently the more inexpensive choice. Increased finance in the fintech industry also makes it possible for mid-sized businesses to acquire breakthrough startups that are revolutionizing the market with their cutting-edge products. Marc Kittenco-founder at Candesic, a strategy consultants firm – says the merger and acquisitions boom is a natural progression of industry growth.
With recent shifts in biotech or the internet, the latest technologies undermine traditional banking and insurance. These include the transition of computing power from mainframes to mobile devices, the cloud/SaaS, big data, ML/AI, and intelligent sensors. Instead of creating them, buying creative people and goods is more readily available, less expensive, quicker, safer, and maybe more significant to financial institutions.
Access to the established player's customer base and infrastructure, especially concerning ever-increasing regulatory and compliance costs.
Additionally, It is a way for owners to cash out, at least partially, in a highly competitive and fast-changing environment."
Marketplace volatility is another reason companies would instead merge than invest in new technologies. It helps them scale and grows, resulting in greater resilience – mainly if uncertainty exists. Since the COVID pandemic, some push and pull are happening in the market constantly. Since M&A may help businesses rationalize, this is a perfect moment to do so. It's an increasingly challenging fundraising period and should continue for the next 12 months. As fintech grows towards working a strategic exit, forces at play also make it a wise time to sell.
Following is a list of the biggest acquisitions that have taken place in 2022 so far.
In a $1.1 billion agreement, US-based SoFi Technologies, which provides banking and personal financial services, will buy Technisys, a banking software provider.
The deal gives SoFi control of the core banking platform used by banks in Latin America and the US. SoFi plans to leverage the Technisys platform to roll out personalized financial services to its banking customers. It is expected that the acquisition will generate additional revenue of up to $800m by 2025. It will also create up to $85m in cost savings.
The supplier of bitcoin infrastructure, Wyre, has agreed to be acquired by checkout and shopper network Bolt. The $1.5 billion acquisition will aid in developing commercial bitcoin use solutions for millions of consumers, merchants, and developers.
Bolt will be able to bring its one-click checkout, authentication, payments, and fraud protection services to the cryptocurrency ecosystem. Furthermore, the acquisition permits NFTs to be purchased through Bolt, cryptos to be traded on Bolt's network, and fiat exchanges and compliance solutions to be available.
By combining their technologies to simplify internet shopping, businesses hope to democratize commerce. Wyre's APIs will make it easier for users to convert cryptocurrency into fiat and lower the entrance barrier for partners and developers.
