Hello Fintech Friends,

This week, Empower – a fintech provider alternative credit underwriting on a mission to solve access to affordable credit for everyday Americans – signed an agreement to acquire my old employer Petal*, a consumer credit card provider that uses cashflow-based underwriting to expand access to credit, as well as Cashalo, a consumer credit and lending company in the Philippines. This marks the next step in the journey for Petal, which was founded in 2016 and crossed 400,000 cardholders. In 2023, Petal spun-off its cash flow underwriting software business, Prism Data, which will not be included in the acquisition. Terms weren't disclosed, but Empower previously raised $175 million through its Series B.

Please find another week of fintech exits and deep reads below. (👍👎 Have feedback for us? Let us know!)

📖 Read of the Week

According to Restive Ventures, "The fintech sector has 10 times as many large M&A deals ($50 million+) as IPOs," with a median acquisition price of $193 million and an average at $403 million, which leads Restive to caution that VCs shouldn't just focus on blockbuster outcomes and IPOS in fintech, as covered by Axios.

"How much money would you save up if you invested your spare change in the stock market? The answer, in practice, seems to be about $2,500 over nine years," according to Axios' look at savings investment app Acorns.

A data-driven look at fintech adoption in vertical software

The two trends I’m most bullish on are vertical software and embedded fintech. Businesses of all sizes and industries rely heavily on software increasingly built for specific verticals. Within verticals, businesses increasingly prefer the convenience of integrated, all-in-one suites over multiple disconnected vendors. These software suites have started embedding financial products to provide more value, monetize at a higher rate, and increase customer retention.

Matt Brown's NotesMatt Brown

Also this week, CB Insights releases its Venture Trends Q1 report, showing fintech funding falling 16% QoQ.

And FT Partners releases its Monthly Market Update & Analysis.

☯️ Exits

💻 IPOs & SPACs

• Oaktree halted the IPO of Banca Progetto SpA and entered bilateral talks after receiving a non-binding bid for the bank at a higher price than the likely listing valuation.
• Investment platform Linqto agreed to go public through a merger with SPAC Blockchain Coinvestors Acquisition in a deal valued at $700 million.
• Ibotta, which provides a digital marketing platform that offers consumers cash rebates, plans to raise $450 million in its IPO at a market value of $2.8 bilion.

🤝 M&A - Fintech

• Fixed income, derivatives and ETF electronic trading platform Tradeweb signed an agreement to acquire Institutional Cash Distributors, an investment platform based in Colorado, for $785 million.
• Gresham Technologies, a provider of reconciliation software and tools, post trade automation and regulatory reporting solutions, was acquired by private equity firm Alliance Bidco for £146.7 million.
• Underbanked credit provider Empower agreed to acquire Petal* and Cashalo.
• Linedata, a provider of asset management and credit technology, acquired DreamQuark, a French startup specializing in the development of AI for the financial services sector.
• Data management provider to the asset management sector Rimes is being sold by investment firm EQT to private equity firm Five Arrows. 

🏦 M&A - Bank and FinServ

• Brookfield Asset Management is in talks to buy a majority stake in private-credit manager Castlelake, with $22 billion in AUM, for $1.5 billion.
• HSBC continues to exit underperforming markets, the latest via a sale of its Argentinian business to Grupo Financiero Galicia for $550 million.
• Financial services information and credit-scoring company Experian will acquire Australian credit bureau illion for $542 million, in a bid to expand into Australia and New Zealand.
• Bain Capital sold its shares in India's Axis Bank via a block trade at $12.87 per share, raising $429 million.
• Blue Owl Capital is launching a real estate finance strategy through its acquisition of real estate lender Prima Capital Advisors for $170 million.
• First Abu Dhabi Bank is studying potential acquisition targets in Turkey, including Yapi Ve Kredi Bankasi.

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🌎 Fintech Around the World

The Middle East’s Fintech 50

How Nigeria can leverage the rise of fintech for economic progress

ZiG Debuts in Zimbabwe’s Sixth Effort at a Revamped Currency

The EU wasted €60M on a pointless fintech fad — but the Belgians won’t let it die

‘Outside of the banks’: Swiss fintech startup to help customers from struggling economies

The Top 10 Ways AI is Revolutionizing Financial Technology In the UK

Philippines: Experts weigh in on leveraging fintech, blockchain solutions for OFW remittances

📚 Deeper Reads & Features

CFPB's 1033 regulation could be a boon for small banks

How Intrafi made bank off the regional banking crisis

Texas Bank Aims to Escape Fate of Rivals After McKinsey Musings

Banks Strike Back Against Private Credit

Capital One Has an Uphill Task With Regulators on Discover Deal

Top Crypto Exchanges Look to Move Beyond Settlements With U.S. Regulators

Why Cash App Pay is a big deal for Block

Cross-border fintech stands out in Y Combinator’s Winter 2024 cohort

How PayJoy built a $300M business by letting the underserved use their smartphones as collateral for loans

Not Free: The Large Hidden Costs of Small-Dollar Loans Made Through Cash Advance Apps

FedNow vs Real-Time Payments (RTP): A Comparative Guide to Both Instant Payment Solutions

The Federal Deposit Insurance Corporation’s Consumer Compliance Supervisory Highlights

Atinuke Idowu, Termii's Co-founder, on working behind the scenes and the rollercoaster ride of building a startup

Italian island overrun by goats is begging people to catch and take them away

Have a news item for us? Reach out to news@thisweekinfintech.com