FinTech Futures: Top five stories of the week – 23 June 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
SVB Financial Group agrees sale of its investment banking business, SVB Securities
SVB to sell its investment banking business
SVB Financial Group, the former parent company of Silicon Valley Bank, has entered into an agreement to sell its investment banking business, SVB Securities, to a group led by Jeff Leerink, SVB Securities’ CEO and founder, and backed by funds managed by hedge fund firm The Baupost Group.
The transaction is expected to close following a court approval hearing scheduled for 29 June.
SVB Financial Group filed for Chapter 11 bankruptcy proceedings in the US back in March following the collapse of Silicon Valley Bank.
As per the agreement, the bidding group will acquire SVB Financial Group’s investment banking business for a combination of cash, repayment of an intercompany note, the assumption of certain liabilities (including significant deferred compensation obligations), and a 5% equity instrument in the buyer entity.
PayPal to sell up to €40bn of European BNPL loans to KKR
Global investment firm KKR is set to buy up to €40 billion of buy now, pay later (BNPL) loans originated by PayPal in Europe as part of an exclusive multi-year deal.
As per the agreement, KKR’s private credit funds and accounts will acquire substantially all of PayPal’s European BNPL portfolio (including France, Germany, Italy, Spain and the UK) at close of transaction, along with future originations of eligible BNPL loans.
The companies say PayPal will be responsible for all the customer-facing activities of the products, including underwriting and servicing.
US paytech Fortis expands into Canada, acquires SmartPay
Fortis expands into Canada, acquires SmartPay
US-based paytech Fortis has announced it has expanded into Canada and has acquired fellow embedded payments provider SmartPay for an undisclosed sum.
By expanding into Canada, Fortis will be able to offer its embedded payment technology to Canadian software platforms and businesses, with firms able to access the full suite of Fortis’ solutions via API integration with their existing payment software. The roll-out supports credit card processing and Interac debit acceptance, with electronic funds transfer (EFT) for B2B and recurring payments clients coming soon.
Fortis has also acquired fellow embedded payments solution provider SmartPay, saying the company has “strong partnerships” in the enterprise software and enterprise resource planning (ERP) ecosystems. SmartPay founders and former managing partners Mike Sheffey and Nate Schloss will join the Fortis leadership team as part of the acquisition.
Mediobanca’s Compass acquires HeidiPay Switzerland
Compass, the consumer credit arm of Italy’s Mediobanca Group, has acquired 100% of HeidiPay Switzerland AG from parent company HeidiPay for an undisclosed sum.
The acquisition will enable Compass to become a consumer credit operator in the Swiss market through HeidiPay Switzerland’s distribution licence. It will also enable Compass to consolidate its partnership with HeidiPay, in which it holds a 19.5% stake after leading the company’s funding round in August 2022.
Founded in 2021, HeidiPay focuses on the development of digital platforms to support buy now, pay later (BNPL) for e-commerce and physical merchants. HeidiPay Switzerland claims over 400 commercial agreements with distributors, brands and technology operators.
Puerto Rico’s Segura Bank taps Temenos to power new digital bank offering
Segura Bank taps Temenos for new digital bank offering
Puerto Rico-based Segura Bank has selected Temenos to power its upcoming cloud-based digital bank offering targeting “mid to high earners in Latin America”.
Segura Bank says it will utilise Temenos’ banking platform on Microsoft Azure to develop digital banking services “faster and at lower cost” as the bank looks to scale across the continent. Temenos’ cloud-native core banking platform will be used for transaction processing, managing customer accounts, and ensuring compliance and efficient know your customer (KYC) checks.
The new digital bank will offer US dollar financial products to help protect Latin American consumers from currency fluctuations and devaluation, enable easier international transactions, and provide access to global markets. It is expected to go live in the coming months.
