Card issuer Marqeta will acquire card management platform Power Finance in a $275 million deal.
“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,” Simon Khalaf, Marqeta’s incoming CEO, said in a Monday (Jan. 30) news release.
“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 program management.”
Founded in 2021, Power offers a cloud-native platform that provides companies with credit card management services when they launch new card programs. Marqeta says the combination of its platform with Power’s will allow its customers to launch a range of credit products, combining the two companies’ rewards technologies.
“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,” Power Finance Co-founder and CEO Randy Fernando said in the release.
“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 release says the deal — set to close during the first quarter of 2023 — consists of $223 million in cash, payable over a two-year period, and $52 million subject to a milestone expected to be reached in the next year.
The announcement comes days after Marqeta announced Khalaf’s appointment as chief executive, a role he’s due to begin Tuesday (Jan. 31). Khalf joined the company in June 2022 and serves as its chief product officer.
He replaces current CEO and Marqeta founder Jason Gardner, who will become the company’s executive chairman.
Also last week, Marqeta launched a partnership with consulting firm Deloitte to speed payment modernization.
The collaboration is aimed at banks, FinTechs and payment providers and combines Deloitte’s payments and consulting expertise with Marqeta’s API-driven card issuing platform.
“The future of payments is digital modernization, and we are focused on advising our clients on ways to engage in a strategic, regulated and compliant way,” Deloitte’s Zachary Aron said.
The companies say that the wide range of payment options available today have forced card providers to bring differentiated value to their customers to remain competitive.
“Consumers want innovative and secure payment options available in a convenient, expedited, and personalized manner,” the firms said in a news release.
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