MoneyLion Inc. (NYSE: ML) has agreed to acquire Even Financial in a private target merger valued at $440 million, with a mix of cash and equity. Expected to close in Q1 2022, the union will accelerate the companies’ “mission of providing financial access and advice to hardworking Americans, reaching them where they are, and enabling them to make financial progress regardless of where they are in life.”
This deal caps a tumultuous year for the fintech industry. Fintech stocks had been flying high as the pandemic helped drive consumers away from traditional brick and mortar institutions toward digital options. With consumers less willing and able to visit banks and financial institutions, companies that offered innovative ways of banking and investment flourished. But many have questioned whether this influx of fintech users represents a permanent shift, or simply a transitory effect of covid-19 where patrons will readily return to their local branches once the pandemic subsides.
This question, combined with the broader economy’s uncertain future as inflation and supply chain disruptions threaten continued GDP growth, led to a sharp selloff of fintech stocks during Q4. Described as “fintech equity carnage,” leading fintech companies’ shares are far off their highs from earlier in 2021. With the surge in omicron cases (see related: Omicron Tests M&A Boom), it remains to be seen whether that will funnel consumers back to fintech – or merely damage the economy to the companies’ detriment.
And just as fintech must contend with these economic uncertainties, the industry also faces increasing regulatory scrutiny. Federal Trade Commission Chair Lina Kahn released a statement last week warning that fintech is ripe for monopolistic abuses. Specifically, Kahn wrote, “Big Tech companies’ participation in payments and financial services could enable them to entrench and extend their market positions and privileged access to data and A.I. techniques in potentially anticompetitive and exploitative ways.” She warns that fintech companies can use their resources to “entrench and extend their market positions in potentially anticompetitive and exploitative ways.” The FTC’s ongoing investigation may spell future antitrust action in the industry.
In this merger, MoneyLion was advised by law firm Davis Polk & Wardwell LLP, and financial advisor Evercore. Even Financial was advised by Goodwin Procter LLP, and financial advisor Broadhaven. Matterhorn’s M&A database harnesses both AI and attorneys to digest the granular deal points of each publicly announced deal over $25 million in value.
