Tritium Partners to seek buyer for GIACT; Hycroft isn’t done yet and adds a new president; Global payments to hit $2.2 tln in 2021
It’s Tuesday. How is everyone doing?
Fintech: The global payments sector will hit $2.2 trillion in 2021, according to SharesPost, which produced the report “Payments: Star of the FinTech World.” Due to mobile devices, payments now make up 34 percent of overall banking compared to just 27 percent in 2011, the report said. Growth in Asia and Latin America is expected to push that number to 36 percent by 2021. Like nearly everyone, SharesPost believes that cryptocurrencies and blockchain will be the newest tech to transform payments.
Fintech M&A remains popular. The number of mergers jumped 50 percent to 900 at the end of 2017, from 600 in 2010, SharesPost said. Investors have poured more than $130 billion into fintech companies since 2014, the report said. There were 1,800 investments in 2018, valued at $40 billion.
Payments remain one of the more lucrative fintech sectors. Credit card companies are enjoying higher enterprise value/revenue multiples compared to banks and payment processors. Rohit Kulkarni, a SharesPost managing director who authored the report, said credit card companies are trading at 15x to 16x, while processors like Square or Adyen are going for 7x to 10x. “Credit card companies tend to have direct consumer relationships and stickier consumer relations,” Kulkarni said. Processors, he said, don’t have that sort of relationship with consumers. But there are some huge deals. Consider PayPal’s $2.2 billion buy of Swedish payment company iZettle. iZettle sold for 18.2x, SharesPost said.
With that, we have another fintech deal this morning. Tritium Partners has hired Raymond James to find a buyer for GIACT Systems. Read my story here.
Tritium is the firm launched by former Austin Ventures executives. They previously sold Century Paymentsto WorldPay in 2013.
Moving on: We also have a fintech personnel move. Sean Minnihan has joined Nomura, where he will lead the financial technology group, according to his LinkedIn profile. Minnihan was previously head of fintech atGCA.
Trading: The Financial Times this morning has a story on one of our favorite topics, secondary deals. This refers to the practice of PE firms selling companies to each other, which has become very popular. The FTmentions Gala, the U.K. bingo hall, that was sold five times by different firms. Throughout this time, Gala’s debt levels crept up until it nearly went bust before it was sold to Ladbrokes in 2016, which was then sold to GVC Holdings this year. Got it?
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