Three months after announcing its proposed acquisition of Sydney fintech startup Pocketbook, zipMoney has this week closed the deal, acquiring the startup for $6 million in cash.
A further $1.5 million will be given subject to the achieving of various performance milestones within approximately 24 months. Meanwhile, Pocketbook cofounders Bosco Tan and Alvin Singh and the rest of the startup’s team will be joining zipMoney.
The company said the acquisition significantly increases zipMoney’s user base and extends its product offering into direct to consumer financial services, complementing its existing POS payments model.
According to zipMoney the acquisition also supports its vision to “create a new financial services model that is built around honesty, visibility, and empowering consumers to make better financial decisions, improving their lifestyle.”
Larry Diamond, CEO and managing director of zipMoney, said Pocketbook will help further the company’s aim of giving Australian consumers honest, responsible, and transparent financial products.
Singh added that with zipMoney’s resources, expertise, and technology, Pocketbook is better positioned to help Australians realise their financial goals.
“We started Pocketbook based on the belief that everybody deserves a clear path towards a brighter financial future. We are thrilled to be joining the zipMoney group, who share a similar vision of empowering consumers through better transparency, responsible, and easy to use financial products.”
Founded in 2013 by Diamond and Peter Gray, zipMoney is a ‘buy now, pay later’ finance product that operates like a payment gateway: online retailers integrate zipMoney into their checkout and customers have the option to pay for their purchase using their zipMoney account, instead of their credit card or PayPal account.
zipMoney had in June announced an oversubscribed placement of $20.6 million to institutional and sophisticated investors, which was to go towards rolling out its new payments product zipPay, further expanding its product offering, and acquiring Pocketbook.
The June announcement came as Pocketbook itself announced a partnership with 1300HomeLoan to help provide consumers with a new way to track and optimise their home loan.
Through this Pocketbook works to automatically detect users who have suboptimal mortgages and in turn provide them with the ability to undertake a free ‘check up’ of their home loan, through 1300HomeLoan.
It’s in this wealth of data that Pocketbook’s huge value lies: founded in 2012, the startup spent some time trying to figure out its revenue strategy with various add-on products, recording its first month of operational revenue through its data analytics services in May this year.
For zipMoney access to Pocketbook’s consumer financial data and its analytics services will allow it to strengthen its lending and credit algorithms and enhance its fraud decision technology. It will also offer new cross-selling opportunities, with zipMoney’s digital wallet solutions to be incorporated into the Pocketbook product.