Callum Turcan, Research Analyst and M&A Writer - Corum Group
M&A activity in the Fintech sector is strong with 692 deals in 2024, roughly on par with the average seen over the past decade. The rise in popularity of new ways to transfer money, such as peer-to-peer activities, is disrupting traditional and alternative providers of financial services. These enterprises adapt by using M&A to incorporate new capabilities into their operations.
Companies that provide innovative Fintech solutions are in high demand from strategic and financial buyers as the world continues to shift away from cash and towards card payment options. The six trends powering M&A activity in the Fintech sector are anti-money laundering tools, AI, Wallet-as-a-Service, compliance, digital identity authorization and mobile banking services.
Starting with our first trend, anti-money laundering tools. Financial services companies must ensure illicit funds aren’t flowing through their business. Illustrating this trend, Effectiv, a developer of AI-powered real-time risk decisioning software with anti-money laundering capabilities, was pocketed by Socure in October 2024 for $136 million to enter the enterprise fraud market.
Pivoting to our second trend, AI. Companies are leveraging AI to process insurance claims and improve outcomes for claimants. Highlighting this trend, EvolutionIQ, an AI-driven platform for disability and claims management, was bought by CCC Intelligent Solutions in December 2024 to expand its market reach and bolster its platform.
Moving on to our third trend, Wallet-as-a-Service. This cloud-based financial technology enables developers to integrate digital wallet capabilities into their platforms. Showcasing this trend, Triangle, a developer of Web3 wallet infrastructure, was acquired by Blockbridge Digital, which is now part of Stripe, in November 2024 to build scalable stablecoin systems.
Shifting to our fourth trend, compliance. Enterprises operating in the financial services industry need to remain in compliance with strict regulations to avoid large fines. Illustrating this trend, Aer Compliance, a provider of employee trade compliance solutions for digital assets, was purchased by StarCompliance in December 2024 to expand its cryptocurrency compliance capabilities.
Our fifth trend is digital identity authorization. As users are increasingly accessing their financial data online, ensuring that only authorized users are accessing that information is paramount. Highlighting this trend, Nook, an AP automation platform with Confirmation of Payee features, was sold to Modulr in November 2024 to launch a new product, Modulr AP powered by Nook.
Lastly, our sixth trend is mobile banking services. Users are increasingly expecting to be able to perform key banking functions from their mobile devices. Showcasing this trend, Yoello, a mobile and payment platform for pubs and restaurants, was acquired in December 2024 by Epos Now to enhance its offerings with mobile payment solutions.
Companies that map to any of these six trends are seeing healthy demand. Acquirers are eager to buy solutions to stay on top of their compliance requirements and provide better user experiences. Fintech enterprises have quickly adopted new AI technologies into their operations to streamline workflow processes and generate actionable insights.
