Mastercard will buy financial data technology provider Finicity in a deal that could reach $985m, giving Experian an exit. This is yet another large exits in this space this year after the acquisitions of Plaid and Credit Karma earlier.
Payment services firm Mastercard agreed to acquire US-based financial data provider Finicity in an $825m acquisition deal that provided credit scoring service Experian with an exit. According to the terms of the transaction, company’s shareholders will also have the chance to potentially get up to $160m in earn-outs depending on its post-acquisition performance. Finicity’s technology powers Experian Boost, which allows customers to connect utility bill payments to their online bank accounts and improve credit scores. Mastercard is planning to integrate the solution into its open banking offering.
Founded in 2000, Finicity has developed a digital budgeting platform which provides data to aid users in managing their finances more effectively. In addition, it also features financial wellness tools and application programming interfaces (APIs) allowing businesses to build their own financial data apps.
The company is part of the broader fintech space which has enjoyed much attention from corporate venture investors as the GCV Analytics chart below illustrates. The number of corporate-backed deals in fintech enterprises has seen an uninterrupted growth from 2014 onwards, having gone from 119 to 466 by 2019. The totals of estimated capita deployed in these rounds also increased multi-fold from $2.55bn in 2014 to $14.64bn last year, clearing suggesting a rise in valuations. Given the extensive investing in this space over the past half a decade, it is no surprise that we are beginning to see multimillion dollar exits now, such as Finicity. Fintech startups Plaid and Credit Karma were acquired in multibillion-dollar deals by payment services Visa and accounting software developer Intuit, respectively, earlier this year.