TECHNOLOGY
“ Similar to what started earlier in biotech or with the internet , a combination of the latest technologies – computation power from mainframe to mobile phones , cloud / SaaS migration , sophisticated sensors , big data , ML / AI – is disrupting traditional banking and insurance . Financing institutions find it easier , cheaper , faster , safer , and even vital to buy innovative teams and products rather than trying to develop in-house .”
He continues : “ For the teams , it is the access to the customer base and the infrastructure of the established player , especially with regards to ever-increasing regulatory and compliance costs . For the owners , it is generally also a way to cash out , at least partially , in a very competitive and fast changing environment .”
Marketplace volatility is another reason why companies would rather merge than invest in new technologies . It helps them to scale and grow , resulting in greater resilience – especially if there is uncertainty . Vivi Friedgut , CEO of Blackbullion , says : “ There ’ s some push and pull happening in the market right now . It ’ s an increasingly tough fundraising period and it ’ s going to continue to be for the next 12 months , at least . This makes it a good time for companies to rationalise through M & A .”
Friedgut points out that , whereas fintechs have been working towards a strategic exit , forces at play also make it a smart time to sell . “ At Blackbullion , we ’ ve spent a couple of years bedding down our business and now ’ s the time for us to really accelerate . The reality is , we probably could have built the product we recently acquired but , strategically , it ’ s more efficient for us to buy it – and we wanted to hit the pedal .”
“ Expect the likes of Revolut and others to suck up all the best technology solutions and become massive global businesses ”
MICHAEL BUCKWORTH FOUNDER OF BUCKWORTHS