Dive Brief:
- Marqeta, an Oakland, California-based fintech that provides virtual credit card services to commercial clients, said in a press release today that it has agreed to acquire Power Finance for $275 million in cash.
- Marqeta will buy the New York-based company to expand on its credit card services and “meet the changing demands and expectations for credit cards from consumers and businesses,” Marqeta said.
- The purchase price includes $223 million, one-third of which will be paid over a two-year period if certain conditions are met, plus $52 million in cash, based on reaching a milestone expected to be achieved in the next 12 months, the release from Marqeta said.
Dive Insight:
The Marqeta acquisition comes as payments companies seek to snap up complementary businesses at a time when upstart fintech valuations have declined because of tougher economic conditions, including high interest rates that have made capital less available.
Power Finance was founded in 2021 by Randy Fernando, who is the company’s CEO, and Andrew Dust, who is its chief financial officer. Last year, the startup raised $16.1 million from investors that included Anthemis, Fin Capital and CRV, among others. Under terms of the acquisition, Fernando will lead product management for Marqeta’s new credit card platform, the release said.
“This acquisition will allow Marqeta customers to launch a wide range of credit products and constructs,” the release said, noting that it will also combine the companies’ rewards programs. The purchase will also let Marqeta use Power Finance’s data science tools and embed services in mobile and web apps.
Marqeta’s expansion move comes just as the company’s founder, Jason Gardner, has turned over day-to-day oversight of the company to a new CEO, naming Simon Khalaf as the next CEO last week, with the appointment becoming effective Jan. 31. Meanwhile, Gardner will become the company’s executive chairman.
