Fintech is white hot these days, with major acquisitions and funding rounds galore. It’s also a relatively new space, with startups only really breaching the thicket of regulations that defines the modern banking and finance world in the past few years. So it is fascinating to watch how Shamir Kark…
SoFi, the online personal finance company, today announced it has signed a definitive agreement to acquire Galileo Financial Technologies (“Galileo”), the powerful financial services API and payments platform. SoFi will pay total purchase consideration of $1.2B to acquire Galileo, comprising cash and stock. Galileo’s digital payments platform enables critical checking and savings account-like functionality via its powerful open APIs, providing companies with an easy way to create sophisticated consumer and B2B financial services. The company’s offerings are accessible via mobile, desktop, and a physical debit card. Galileo’s APIs power functionalities including account set-up, funding, direct deposit, ACH transfer, IVR, early paycheck direct deposit, bill pay, transaction notifications, check balance, and point of sale authorization as well as dozens of other capabilities. Galileo processed over $53B of annualized payments volume in March 2020, up from $26B in September 2019, with accelerating growth. SoFi Money is already tightly integrated with Galileo’s payment platform including several of its leading account and events API functionalities. Galileo and SoFi will work together to accelerate the pace of technology innovation to offer Galileo’s partners, and subsequently consumers everywhere, even more value. These new functionalities and services will further help Galileo’s current and new partners capture the secular shift of financial transactions from the physical-only to a multi-channel digital and physical platform. With the addition of Galileo, SoFi strengthens its capabilities, rounding out its best-in-class technology ecosystem. Additionally, the combination will extend the reach of its products to other Galileo partners in the United States and international markets, while offering diversification and scale to SoFi’s existing infrastructure. “SoFi has established itself as a leader in the fintech sector, providing our more than one million members a full array of financial products to help them get their money right,” said Anthony Noto, CEO of SoFi. “The response by our members to our innovation across borrowing, saving, spending, and investing has motivated us to think bigger, bolder and more expansively given the insatiable consumer appetite for financial services innovation. Together with Galileo, we will partner to build on our companies’ strengths to drive even greater financial technology innovation, making those products and services available to both current and future partners. While we march forward on our mission to help people achieve financial independence through our own direct efforts, with Galileo, we can enable a broader ecosystem of companies to join us in helping the world achieve financial independence.” “SoFi has built a very strong diversified financial services company focusing on a full suite of financial services. These are products that many of our leading fintech clients are asking for. Distributing products through our enterprise class API is the vision behind this combination. I think it’s very powerful,” said Clay Wilkes, CEO of Galileo. “We’re excited to work with SoFi to build on the services that have made Galileo the leading supplier of infrastructure services to leading financial, technology, and fintech companies. With the help of SoFi, we intend to continue to grow with and support all of our existing clients and the product roadmaps that they have defined.” “Clay is an extraordinary founder and leader,” said Noto. “He has had an unwavering vision since starting Galileo 19 years ago. I could not be more excited by the opportunity to work side-by-side with a visionary who has not only built a great company, but one that has endured unprecedented technological and financial changes, through multiple economic cycles. With Clay at the helm, Galileo’s durability has resulted in its industry leading position at the precipice of a massive multi-decade secular shift to digital financial services that we have already seen unfold across almost every other consumer industry sector.” Galileo will continue to operate as an independent subsidiary of Social Finance Inc, with Wilkes as CEO. Galileo will collaborate with SoFi to accelerate the technology roadmap needs for consumer financial offerings, as well as offering the full SoFi suite of products and services to those Galileo partners who are looking to broaden their offering to better meet the needs of their customers. The transaction is subject to regulatory approvals and other customary closing conditions. Goldman Sachs & Co. LLC and Citigroup served as financial advisors and WilmerHale acted as legal advisor to SoFi. Qatalyst Partners served as financial advisor and Dorsey & Whitney acted as legal advisor to Galileo. The post Sofi to Acquire Galileo Financial Technologies appeared first on The Fintech Times.
37% of small businesses will run out of cash in under six weeks 69% of businesses in leisure and hospitality expect their revenue to totally disappear Collective small business revenue set to decline by 57% by end of April Government support needs to get into SME hands as soon as possible Tide, the UK’s leading business banking platform, has released new research today revealing the health of the UK’s small business community just weeks into the COVID-19 crisis. Tide surveyed over 1,000 small business leaders (with between 0 and 49 employees) to understand the financial health of their businesses. Three in four (75%) businesses say they have been negatively affected by COVID-19 so far, and this looks set to worsen throughout April. When asked about their expectations for their business’ revenue, 80% projected that their revenue will decline in April 2020, compared to April 2019. Over one in three (36%) expect their revenue to decline by more than 90%. The industries expected to be worst hit are leisure and hospitality, with 64% expecting to see their revenue decline by 100%, followed by retail, with 38% expecting their revenue to totally disappear. Businesses in IT and Telecoms expect to be least impacted, with just under a quarter (23%) saying they don’t expect to see any decline in their revenue compared to April 2019. If these expectations come to pass, Tide has calculated* that collective small business revenue (including businesses affected positively and negatively by COVID-19) will decline by around 57% over the course of April 2020. This builds on a 20% decline already observed on the Tide platform in the last seven days of March. Considering small businesses contribute around £1.5 trillion per annum (37%) to UK private sector turnover, this is a worrying statistic. This decline would lead to a 21% reduction in UK private sector turnover in April from small businesses alone (seasonally unadjusted). And this will add to declines in mid- and large sized business turnover. Oliver Prill, Tide CEO said: “As a banking platform dedicated to supporting small businesses, Tide is extremely concerned about the health of the SME community at this time. From the conversations we have had with our 150,000 SME members we knew the situation was very tough, but this data has relieved just how tough it is, and how much harder it is likely to get for small businesses to weather this storm. “The government’s support for small businesses is highly welcome and needed, and it has the potential to make a huge difference in helping SMEs survive. There now needs to be a focus from the government, and other organisations involved in delivering financial support, to do everything possible to get the money into small businesses’ hands as soon as possible.” Additionally, the research reveals that 37% of small businesses have cash reserves that will last them six weeks or less without government support. And 19% only have cash reserves that will last up to three weeks. Time is of the essence to distribute government support quickly and efficiently. The post Small business revenue set to decline by nearly 60% in April appeared first on The Fintech Times.
SoFi, the online personal finance company, today announced it has signed a definitive agreement to acquire Galileo Financial Technologies (“Galileo”), the
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