Nearly a month after announcing its plans to acquire a Swedish open banking platform, Visa Inc. (V, Financial) revealed on Thursday it is buying another startup, Currencycloud, in a deal that values the British payments company at 700 million pounds ($962 million).
The fintech deal is the second Visa has inked after its attempt to acquire Plaid, a U.S. rival, was foiled by regulators earlier this year. Last month, the company agreed to buy Tink for $2.1 billion. The Swedish open banking company calls on lenders to provide third-party firms with access to coveted consumer banking data.
At the beginning of 2020, Visa led an $80 million investment in Currencycloud. As a result, the San Francisco-based credit card giant said the total sum it is paying will be reduced by the outstanding equity it already owns.
Founded in 2007, Currencycloud provides a cloud-based software platform for banks and fintech companies to process cross-border payments. Its products also power popular banking and payment apps like Monzo, Starling and Revolut.
Visa noted there has been a significant increase in cross-border payments due to rising demand from businesses of all sizes around the world. As such, the combination of the two companies is expected to strengthen its existing foreign exchange capabilities in regard to accelerating the time-to-market and improving payment transparency for customers.
In a statement, Colleen Ostrowski, Visa’s global treasurer, noted the acquisition is “another example” of the company “executing on our network of networks strategy to facilitate global money movement.”
“Consumers and businesses increasingly expect transparency, speed and simplicity when making or receiving international payments,” she said. “With our acquisition of Currencycloud, we can support our clients and partners to further reduce the pain points of cross-border payments and develop great user experiences for their customers.”
Emphasizing the company’s commitment to “deliver a better tomorrow for all,” Currencycloud CEO Mike Laven also expressed his excitement for the merger.
“Re-imagining how money flows around the global economy just got more exciting as we join Visa,” he said. “The combination of Currencycloud’s fintech expertise and Visa’s network will enable us to deliver greater customer value to the businesses moving money across borders.”
Following the deal’s close, Currencycloud will continue to operate out of its London headquarters and retain its current management team.
With a $535.78 billion market cap, shares of Visa were relatively flat at $244.17 following the announcement. GuruFocus data shows the stock has surged 22% over the past year, however, as consumers relied more on digital payments during the Covid-19 pandemic.
According to GuruFocus’ Industry Overview, Visa is the largest player in the credit services sector, followed by Mastercard Inc. (MA, Financial), PayPal Holdings Inc. (PYPL, Financial) and American Express Co. (AXP, Financial).
Notable gurus who are invested in Visa include Ken Fisher (Trades, Portfolio), Frank Sands (Trades, Portfolio), Warren Buffett (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Chuck Akre (Trades, Portfolio), Spiros Segalas (Trades, Portfolio), Andreas Halvorsen (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), Daniel Loeb (Trades, Portfolio), Steven Cohen (Trades, Portfolio), Diamond Hill Capital (Trades, Portfolio) and Mairs and Power (Trades, Portfolio).
