FinTech has shown strong growth in the last five years, but there were some questions as to why there is so little M&A in the industry. There was always an implicit assumption that the larger players like banks/financial institutions would be interested in acquiring some of the upcoming lending platforms, blockchain plays or even the payment apps. It was only in the latter half of 2010 that banks realized the emerging threat of FinTech companies. As FinTech startups started gaining momentum, a fear set among banking incumbents about the next “Blockbuster” moment. This spurred a rise of bank innovation teams to combat FinTech teams through partnerships, investments, and acquisitions.
MEDICI has done extensive research on how banks and other financial institutions have started to take a keen interest in buying and investing in startups.[1] We have also tracked the latest in investment rounds by banks/FIs for the year. In this article, we will look into acquisitions in the FinTech industry. The FinTech space saw some uptick from 2017 and this year, we have seen 21 acquisition deals by major banks and FIs. This year, we witnessed a total acquisition deal value of more than 1.4B USD. This does not include deals where the acquisition values were undisclosed. In the 21 acquisition deals, we saw 10 banks acquiring 13 FinTechs; 2 asset management companies acquiring 2 FinTech; and 5 insurance companies acquiring 5 FinTechs. The highest disclosed funding round was 1.06B USD when Intermediate Capital Group, an asset management company acquired IRIS software, which specializes in accounting software.
Major banking players in the acquisition spree this year were Goldman Sachs, Banco Sabadell Group, and Societe Generale, which acquired more than two FinTech
