Mastercard has reached a deal to buy the financial data-provider Finicity for $825 million, the companies said.
The deal could result in an additional earn-out of $160 million for Finicity shareholders if certain performance targets are met.
The companies said Finicity’s complementary technology and teams would strengthen Mastercard’s open banking platform and the deal would enhance co-creation efforts with fintech companies and financial institutions.
(Open banking provides third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and nonbank financial institutions through the use of application programming interfaces (APIs).)
“With the addition of Finicity, we expect to not only advance our open banking strategy but enhance how we support and accelerate today’s digital economy across several markets,” Michael Miebach, president of Mastercard, said. “Finicity has a proven business, built on partnerships with thousands of banks and fintechs, similar to us.”
In 2019, Mastercard launched a set of open-banking solutions in Europe and has made a number of investments in the space in recent years.
Mastercard said it does not expect the acquisition to be incrementally dilutive to its business for more than 24 months.
Mastercard shares were up nearly 4% in midday trading. They are up 50% in the last three months compared with a 39% increase in the S&P 500 SPX.
Said Steve Smith, chief executive officer and co-founder of Finicity: “Since our founding, Nick Thomas and I have focused on developing industry-leading technology and building an organization that empowers consumers and organizations to better understand, manage, and use their financial data to improve their financial lives. Enabling people to access and control their data, while ensuring best practices to protect that data, will continue to drive tremendous innovation that increases financial literacy, inclusion, and health.”
Finicity, based in Salt Lake City, has about 500 employees globally. Since 1999, it has raised at least $80 million in venture funding, according to Crunchbase data.
The deal is expected to close by the end of the year.