Fintechs are still buying banks (TWIF 6/25)

An architectural tour of Istanbul

Hello Fintech Friends,

New data were published this week showing that a surprising number of fintech and crypto companies are still out there buying banks:

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

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☯️ Exits

💻 IPOs & SPACs

Investcorp, a Bahranian alternative asset manager, is looking to raise $600 million from an IPO sale of its portfolio including credit, real estate and private equity.

Morgan Stanley fintech bankers on this year's IPO climate: "The data said that they're OK with a company with slightly positive to negative 10% operating margin, but [which] is growing 30% to 40% on revenue. What they don't want is a company that's negative 50% margin growing at 300%. So the company needs to meet the rule of 40."

🤝 M&A - Fintech

Consumer stock investing platform Robinhood this week announced that it will acquire X1, the maker of a premium consumer rewards credit card, for $95 million in cash. X1 had previously raised $60 million.
Republic, an investing platform for startup equity and alternative investments, bought a 9.5% stake in crypto broker-dealer INX at a $50 million valuation, with an agreement to acquire of 100% of equity at a valuation of $120 million as early as Q3 this year.
Fortis, a builder of embedded financial solutions, acquired Canadian payments provider SmartPay in order to go live in Canada and roll out out augmented funding and settlement capabilities for online marketplaces.
Mediobanca Group, an Italian banking consortium, signed an agreement for its consumer banking unit Compassb to acquire Swiss buy-now-pay-later fintech loan provider HeidiPay.
Banking-as-a-Service provider Bankable acquired embedded finance software Arex Markets in order to add working capital (flexible invoice financing, corporate credit cards, lodged cards and revolving credit) to its APIs.
PayPal and asset manager KKR entered into a multi-year partnership in which the investment giant will initially purchase €3 billion in PayPal loans, but may purchase up to €40 billion of buy now, pay later loan receivables from the company across Europe.
Baker Hill, builder of a loan origination, risk management, and analytics software, was acquired by Flexpoint, a private equity firm focused on financial services and healthcare.
Private equity firm Summit Partners bought a stake in TradingHub, a UK provider of risk-based software solutions for financial markets.

🇸🇬 Packed house for our first Singapore Fintech Happy Hour! Thank you to everyone who came out.

Want to join the next one? Sign up at https://t.co/1ompSv1Fye

Huge shout-out to @os7borne and @palathink_ for organizing 👏 pic.twitter.com/Mn26pInaym
— This Week in Fintech (@twifintech) June 23, 2023

🏦 M&A - Bank and FinServ

Indian mortgage lender HDFC sold off its ₹90 billion ($1.11 billion) education loan arm to a private equity consortium.
Bankrupt regional bank SVB agreed to sell off its investment banking division SVB Securities to its CEO Jeff Leerink, who created the group when he sold his health care-focused investment bank to SVB in 2018.
It was revealed that Abu Dhabi wealth fund ADQ previously held talks to acquire investment bank Lazard.

The Biden Administration and US regulators are re-evaluating their thinking on bank mergers, trying to thread the needle between increased banking sector consolidation (bad) and the collapse of smaller, weaker regional banks (also bad).

This month, @HelenFemix & I had the privilege of talking to Evan Dawson, UX Researcher at @stripe & Rhea Fofana Portfolio Manager at @UnLtd about all things Pride, fintech & equality 🌈 https://t.co/wtyAgtknWB pic.twitter.com/HPfa0NxD2h
— Julie VerHage-Greenberg (@julieverhage) June 21, 2023

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— Nik (@NikMilanovic) June 20, 2023