Marqeta, a US-based modern card issuing platform, has agreed to acquire credit card programme management platform Power Finance for a total of $223m in cash.
Under the terms of the agreement, Marqeta will pay about one-third of the total consideration over two years, subject to certain conditions.
The company is expected to pay $52m in potential milestone payments, subject to achieving a milestone within the coming 12 months.
Established in early 2021, Power Finance offers credit card programme management services through its cloud-native platform, to help companies create new credit card programmes.
The company is backed by investors including Anthemis, Fin Capital, CRV, Dash Fund and Restive Ventures.
As part of the transaction, Power Finance CEO Randy Fernando will be appointed as product management lead for Marqeta’s credit card platform.
The acquisition is expected to close in the first quarter of 2023, subject to the satisfaction of certain customary closing conditions.
Power Finance co-founder and CEO Randy Fernando said: “Companies like ours were made possible because of the path Marqeta blazed in modern card issuing, demonstrating the possibilities in payments with flexible and modern payment infrastructure.
“At Power, we built a full-stack, cloud-native credit card issuance platform, and by becoming a part of Marqeta we have the ability now to bring this innovation to a much larger market at global scale.”
The acquisition allows Marqeta and Power Finance to combine their platforms.
It will combine Power Finance’s next-gen rewards engine with Marqeta’s rewards innovations.
Also, it will add to Power Finance’s data science toolbox and ability to embed experiences inside existing mobile and web applications.
Through the acquisition, Marqeta is enabled to provide its customers with the required tools to create advanced credit products that address evolving needs of consumers and businesses.
In addition, the company intends to advance its credit product capabilities, and help its customers to launch a wide range of credit products and constructs.
Marqeta incoming CEO Simon Khalaf said: “We’re thrilled to welcome the Power team and product to Marqeta. We already see considerable demand for differentiated credit products from companies looking to innovate in this space who are held back by the constraints of legacy technology.
“We thoroughly examined possible acquisitions to more quickly establish Marqeta’s leadership in the modern credit space. It became clear to us that Power would strengthen Marqeta’s platform with a best-in-class tech stack for credit card programme management.”