J.P. Morgan Will Buy Payments Firm WePay -- WSJ
October 18 2017 - 3:02AM
Dow Jones News
By Peter Rudegeair
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 18, 2017).
J.P. Morgan Chase & Co. said that it agreed to buy payments
company WePay Inc. in the bank's first sizable acquisition of a
financial-technology startup.
The banking giant plans to roll out WePay's technology to J.P.
Morgan's four million small-business customers, said Matt Kane, CEO
of Chase Merchant Services. WePay, which has roughly 200 employees,
helps online marketplaces and crowdfunding websites like GoFundMe
process payments.
The two companies didn't disclose terms of the deal. But a
person familiar with the matter said the price was above the
roughly $220 million valuation that Redwood City, Calif.-based
WePay achieved in a 2015 fundraising.
The growing popularity of e-commerce and mobile shopping has
fueled deal making in the payments sector of late. There have been
166 deals involving payments companies in 2017 for a total of at
least $29.3 billion, the most in any segment of fintech, according
to investment bank Financial Technology Partners LP.
Financial institutions have been eager to snap up tech companies
like WePay that embed payments into the background of software that
businesses use to handle their main tasks. Over the past five
years, First Data Corp., Vantiv Inc. and other traditional payment
providers have spent more than $10 billion on acquisitions of
so-called integrated payments firms, according to 451 Research,
which focuses on technology advisory work.
Even though J.P. Morgan, led by CEO James Dimon, hasn't made
many large acquisitions of fintech companies, it has been an active
investor in startups there. Over the past 12 months, it
participated in a $100 million fundraising for business-to-business
payments firm Bill.com Inc. and a $50 million fundraising for
LevelUp, which enables customers to pay at restaurants and coffee
shops using their smartphones.
Earlier this year, J.P. Morgan also acquired the technology
behind MCX, a mobile-payments network of big merchants such as
Wal-Mart Stores Inc. that failed to gain widespread adoption. The
bank hoped the deal would expand the reach of its Chase Pay mobile
wallet.
J.P. Morgan also joined with On Deck Capital Inc. in 2016 to
help make loans to some of the bank's small business customers.
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires
October 18, 2017 02:47 ET (06:47 GMT)
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