Visa to buy Swedish fintech start-up Tink for nearly £2bn: Payments giant snaps up open banking platform after being forced to abandon similar deal
- Visa is buying Swedish fin-tech Tink for $2.2bn
- Tink develops technology to allow fintechs to connect to customers from different financial institutions
- It comes after Visa was forced to abandon its deal with another open banking platform earlier this year
Visa has announced plans to buy Swedish fintech Tink for $2.2billion just months after abandoning a similar deal.
Tink, founded in 2012, develops technology that allows third-party applications to connect to customers from different financial institutions.
It is a system known as open banking, which was introduced in Britain in 2015.
Visa is set to buy Tink as it eyes opportunities in the growing European open banking market
UK regulated banks are required to let customers share their financial data, including spending habits and regular payments, with other banks or savings apps.
The fintech is partnered with 3,400 banks and financial institutions, reaching millions of customers across Europe.
Regulators have been trying to encourage more open banking platforms like Tink to increase competition and choice across Europe.
Visa said the deal would encourage open banking, which has faced criticism from established banks which bemoan the added bureaucracy.
‘Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals,’ said Al Kelly, chief executive and chairman of Visa.
The $2.2billion price tag is a 165 per cent premium on Tink’s valuation last December, when it closed a fundraising round with investment from the likes of PayPal and BNP Paribas.
European venture fund Dawn Capital is also an investor in Tink and in another open banking platform iZettle.
What does Tink do?
Tink is an open banking platform which was launched in 2012 by founders Daniel Kjellen and Fredrik Hedberg.
Based in Stockholm, Tink provides infrastructure and data products that are then used by financial institutions or fintechs.
It offers products like account aggregation, payment initiation, data enrichment, and personal finance management.
They can be used to develop standalone services or be integrated into existing apps.
Its partners include BNP Paribas and Klarna.
‘With Tink and iZettle, Sweden has now produced two of Europe’s largest ever fintech M&A exits, reflecting the world-class innovation, commercial excellence and entrepreneurial talent we have found across the Nordic market,’ John Bell, general partner at Dawn Capital said.
‘As the only investor in both companies, we are delighted to have supported their successful journeys to new homes within corporations with global reach, validating the relevance of the B2B tech coming out of Europe.
‘We wish Tink continuing success in the next chapter of its journey.’
The deal comes after an antitrust lawsuit scuppered Visa’s $5.3billion takeover of open banking giant Plaid earlier this year.
Last November the US Department of Justice filed a lawsuit saying Visa is a ‘monopolist in online debt transactions’ and the acquisition would ‘eliminate a nascent competitive threat that would likely result in substantial savings and innovative online debt services for merchants and consumers’.
The open banking regulations in Europe mean it is unlikely Tink will face the same issue, although it is still subject to regulatory approvals.
Tink will retain its brand and current management team and its headquarters will remain in Stockholm.
‘We have built something incredible and at the same time we have only scratched the surface.
‘Joining Visa, we will be able to move faster and reach further than ever before.
‘Visa is the perfect partner for the next stage of Tink’s journey, and we are incredibly excited about what this will bring to our employees, customers and for the future of financial services,’ said Daniel Kjellén, chief executive and co-founder of Tink.