Marqeta Inc. today Announce Plans to buy Power Finance Inc., a fintech startup that came out of stealth mode last year, for $223 million in cash.
Marqeta will pay an additional $53 million if undisclosed performance milestones are met after the deal closes. Power Finance is on track to reach this milestone within 12 months.Before the acquisition, the startup improve $16.1 million in seed funding from investors and a $300 million line of credit.
Oakland, Calif.-based Marqeta is set to list on Nasdaq through an initial public offering in 2021, improve $1.2 billion. It operates a platform that enables companies to issue branded payment cards to their customers and employees.Marchetta Generated Revenue for the third quarter was $192 million, up 46% from the same period last year.
New York-based Power Finance also focuses on the payment card market. Founded in 2020, the startup has developed a platform that enables companies to develop rewards programs for the branded payment cards they issue to customers. According to Power Finance, its platform can align rewards with customers’ shopping preferences to improve user retention.
The startup also offers several complementary tools. As part of its platform, Power Finance offers a dashboard that enables companies to track metrics such as the volume and value of transactions made with its branded payment cards. Built-in marketing features can be used to deliver customized promotions to cardholders.
Power Finance offers its platform along with a range of professional services. The startup helps companies design payment cards, run marketing campaigns and develop customer retention strategies. In addition, Power Finance can also provide technical support to the company’s cardholders.
Following the acquisition, Marqeta will integrate Power Finance’s technology with its payment card issuance platform. According to Marqeta, the startup’s tools for building rewards programs will help companies bring more competitive payment cards to market.
“We thoroughly reviewed possible acquisitions to more quickly establish Marqeta’s leadership in modern credit,” said incoming Marqeta chief executive Simon Khalaf, appointment to the top job earlier this month. “It was clear to us that Power would strengthen Marqeta’s platform with a best-in-class credit card project management technology stack.”
Marqeta’s platform is used by fintech startups to issue payment cards to their users. Marqeta also enables companies to issue corporate credit cards to their employees. For example, online retailers use the company’s platform to help employees more easily buy goods from suppliers.
The acquisition of Power Finance is part of a broader effort by Marqeta to expand its focus beyond the payment card issuance market.before it expand Entered banking technology with the launch of a product suite called Marqeta for Banking. The product suite promises to help companies develop financial services such as deposit accounts with less time and effort than usual tasks.
