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Fintech card issuing platform Marqeta acquires rival Power Finance for $275 Million

The fintech industry is proving to be a high growth sector with the market estimated to be $645.45 billion by 2026, a 40% increase from 2022. The main catalyst of this growth has been the development of artificial intelligence and blockchain technology. To accelerate this growth further, firms seek to expand through acquisitions in hopes of gaining more sophisticated technology.

This notion can be exemplified by the recent acquisition by Marqeta of Power Finance in a $275 million all-cash deal, where one third of the purchase price is payable over a two year time-frame.

Marqeta, a card issuing and payment platform, has a valuation of $3.7 billion and provides an API platform for card issuing and transaction processing. This technology underpins the wallet and payment system utilised by the likes of Goldman Sachs, Uber and Google.

The acquisition of Power Finance allows Marqeta to gain Power's credit issuance system which facilitates banks and firms to embed tailored rewards and promotions into their applications.

Power Finance's CEO and co-founder Randy Fernando mentioned: “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”.

Marqeta’s main objective with this acquisition is to “significantly expand capabilities” in the credit product and it will allow users to benefit from a “wider range of products” through the implementation of Power’s AI data toolbox.

Upon closing of the deal, Randy Fernando, the CEO of Power will lead the management of the credit product.

From our perspective, Marqeta makes a strategically beneficial move to further expand and consolidate its position in the consumer credit space after its entry in 2021. The expertise and technology from Power will be invaluable for Marqeta in growing and diversifying as it has historically been focused on prepaid debit cards.

Written by: Francesco D’Andrea

Sources: TechCrunch, Marqeta, Business Wire and Linkedin.

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