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Consolidation Continues as FIS Acquires Bond
Fintech giant FIS, which offers a wide range of payment, banking, and investment services, has acquired embedded finance startup Bond. The deal was confirmed after weeks of rumors, however, the financial details of the acquisition have not been disclosed. Bond has raised a total of $42 million in funding from investors like Coatue Management, Goldman Sachs, Mastercard, and Canaan Partners, making it a valuable target in the fintech market.
What is Embedded Finance?
Embedded finance, also known as banking-as-a-service (BaaS), is the integration of financial services into non-financial companies’ products. This allows the businesses to offer banking solutions like credit cards and bank accounts to their customers.
Bond’s AI-Powered Infrastructure
Bond is an AI-powered infrastructure that helps digital brands, including fintech startups like Pocketbook and Everest, offer personalized and compliant banking products to their customers. The company’s focus has been on building APIs and software that facilitates commercial and consumer credit card solutions, debit cards, and accounts.
What the Acquisition Means for FIS and Bond
The FIS and Bond leadership teams will determine how the two companies will work together, including how FIS will incorporate Bond’s capabilities into its existing relationships. Himal Makwana, FIS SVP of Platforms, in partnership with the company’s integration management office, will lead post-purchase planning activities.
Consolidation in the Fintech Market
Consolidation in the fintech market has been ongoing as larger incumbents and fintechs seek to buy innovative startups to update their own products and services amid the competitive landscape. In early 2021, Marqeta acquired financial infrastructure startup Power Finance, while JP Morgan closed its acquisition of Aumni, and Brazilian fintech infra company Pismo is said to be in the midst of being courted by the likes of Visa and Mastercard in a reported $1 billion transaction.
The History of FIS’s Acquisitions
FIS is no stranger to acquisitions. In 2019, the company acquired WorldPay for $43 billion, making it one of the largest-ever acquisitions in the world of payments. However, the deal did not pan out as expected, and FIS confirmed in February 2021 that it would be spinning WorldPay off.
Conclusion
The fintech industry is experiencing a period of consolidation, with larger companies looking to acquire innovative startups to stay ahead of their competition. FIS’s acquisition of Bond will allow the company to incorporate Bond’s AI-powered infrastructure and capabilities into its existing products and services, creating new opportunities for growth in the industry.
FAQs
What is FIS?
FIS is a fintech company that offers a wide range of payment, banking, and investment services.
What is Bond?
Bond is an embedded finance startup that offers AI-powered infrastructure and software to facilitate debit cards, credit cards, and accounts for digital brands.
What is Embedded Finance?
Embedded finance, also known as banking-as-a-service (BaaS), is the integration of financial services into non-financial companies’ products. This allows the businesses to offer banking solutions like credit cards and bank accounts to their customers.
What is the difference between FIS and Bond?
FIS is a larger, more established fintech company that offers payment, banking, and investment services. Bond is a startup that specializes in embedded finance, using AI-powered infrastructure to provide debit cards, credit cards, and accounts for digital brands.
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