Visa takes over Swedish fintech Tink for $2.15bn
09:19, 24 June 2021
Visa, the world’s most valuable financial services company, has announced an agreement to buy Swedish fintech firm Tink for €1.8bn ($2.15bn).
Tink is an open banking platform that enables banks, fintechs and merchants to build tailored financial-management products and services.
It connects to more than 3,400 banks and financial institutions that reach over 250 million bank customers across Europe.
“Visa is committed to doing all we can to foster innovation and empower consumers in support of Europe’s open banking goals,” said Al Kelly, CEO and chairman of Visa.
“By bringing together Visa’s network of networks and Tink’s open banking capabilities, we will deliver increased value to European consumers and businesses with tools to make their financial lives more simple, reliable and secure.”
Tink will retain its brand and current management team, and its headquarters will remain in Stockholm, Sweden.
Pandemic boosts fintech sector
The COVID-19 pandemic has irreversibly increased the shift to digital financial services, a Tink report published earlier in June showed.
As a result of the pandemic, financial institutions have been forced to adapt to serve their customers remotely, while people across all age groups have had to become familiar with using more digital services.
“The pandemic has forced many executives to remedy the lack of personal interaction with customers by focusing on delivering digital services,” said Daniel Kjellén, co-founder and CEO of Tink.
“Financial institutions have seen that open banking technology presents opportunities to increase the speed of innovation and introduce new commercial streams and revenue opportunities, while enabling operational efficiencies that will benefit their business long term.”
According to the Tink report, 41% of European financial executives believe the effects of the pandemic on the financial services industry will be permanent.
As a result, big international financial groups have been hunting promising fintech startups to get a foothold in the market. Tink is Visa’s second big acquisition in this sector after that of Plaid in January 2020.
High returns for Tink’s investors
The price Visa announced for Tink’s acquisition is almost three times higher than the company’s estimated valuation after its latest financing round in December 2020. At the time, Tink’s value was estimated at €680m, according to Craft.co data.
In February 2019, Tink raised €56m in a funding round led by New York-based Insight Venture Partners. In June the same year, the Swedish fintech announced a strategic investment from PayPal without disclosing its value.
Last year, Tink raised another €175m through two financing rounds – one in January and one in December – to finance its expansion. The lead investors included Dawn Capital, HMI Capital and Eurazeo Growth.
In 2020 Tink made three major acquisitions as part of its strategy to invest in intelligent data services based on open banking. It acquired Swedish credit-decisioning firm Instantor, Spanish account aggregation provider Eurobits, and the aggregation platform of UK open banking pioneer OpenWrks.
The acquisition spree continued with the takeover of German open banking technology provider FinTecSystems in May 2021.
In December 2020, Tink said it had an annual recurring revenue (ARR) of €30m, which means that Visa valued it at approximately 60 times its revenue.
Visa's capitalisation recently passed $500bn, almost 23 times its 2020 revenues ($21.85bn) and 46 times its net profit ($10.87bn).