Open banking startup Adatree acquired by payments fintech Fat Zebra

- February 6, 2024 2 MIN READ
Adatree, Shane Doolan. Jill Berry
Adatree cofounders Shane Doolan and Jill Berry
Open banking facilitation startup Adatree has been acquired by Sydney small business payments provider Fat Zebra for an undisclosed sum.

The Sydney regtech platform was the first early-stage startup approved to take part in Australia’s open banking system as Accredited Data Recipient (ADR) for the Consumer Data Right (CDR).

Adatree helps fintechs gain access to open banking, offering of a scalable technology platform for companies to access and leverage data, accessible through a single API.

But the M&A deal comes amid broader concerns that Australia’s consumer data right (CDR) roll out has stalled since its launch in 2020 under the former Coalition government. Concerns were raised in May last year by FinTech Australia and others to sort out a CDR roadmap but progress has been slow under Labor.

It’s nearly 12 months since another open banking platform Basiq was acquired by payments giant Cuscal.

UK CDR software startup TrueLayer has halted Australian operations in late 2022, just 18 months after its arrival, an initial warning of the difficulties the sector was facing in a sluggish adoption.

Adatree raised $1.2 million in Seed funding in early 2021. Tyro Payments cofounder Peter Haig and Kerry Roxburgh led the round alongside Equity Seed, Kylie Frazer and Rachael Neumann (now of Flying Fox), and bank executive Angus McBean. It was cofounded in 2019 by former Tyro Payments and Volt Bank employees Jill Berry, Shane Doolan and Jason Lamble.

Adatree is currently connected to 114 banking data sources, covering 99.73% of the household banking market share, as well as 20 energy companies. The startup has been described as “poles and wires of the Consumer Data Right. CDR turned its attention to energy in November last year.The Adatree deal is Fat Zebra’s first acquisition, with founder and CEO Pred Dragila saying it’s a strategic move to integrate CDR-powered services alongside his fintech’s payment solutions.Fat Zebra processes payments for more than 30,000 SME and enterprise Australian merchants, with a customer base that includes PayPal, MYOB, Macquarie Bank, Sportsbet, and Zip.

The company handles approximately 250 million annual e-commerce transactions in Australia.

“Open data and open payments are the future of the financial landscape,” Dragila said.

“This acquisition positions Fat Zebra to drive smarter, data-driven payments in Australia, offering enhanced services to our clients and partners.”

Attention in open banking is now turning to what’s known as “Action Initiation”, a capability currently in design. The current state of play is that data can be accessed and leveraged for use cases, known as ‘read access’. Action Initiation will allow accredited companies to initiate actions, known as ‘write access’ – enabling actions including initiating payments, opening and closing accounts, and updating customer information – via the CDR regulatory framework.

All the Adatree team will join Fat Zebra.

Berry, Adatree’s CEO, said they were excited by what the acquisition means for her team, company, and product roadmap. J

“Joining forces with Fat Zebra allows us to accelerate our mission of advancing Open Banking and data-driven solutions,” she said.

“This will enable the development of features to make payments smarter, showing immediate synergies and benefits with the companies joining.”