(Bloomberg) – Oportun Financial Corp., a fintech lender, has agreed to buy online banking platform Digit to boost its artificial intelligence and digital capabilities.
Oportun will pay approximately $212.9 million in stock and cash, it said in a statement Tuesday. Digit will continue to be led by its founder and CEO, Ethan Bloch, and all of its employees will join Oportun.
The deal will help Oportun grow into online banking three to five years faster than if the company had built it alone, CEO Raul Vazquez said in the statement. Digit, founded in 2013, has around 600,000 paying members and uses artificial intelligence to help consumers figure out how much money they can save without making it difficult to pay bills.
“The combination brings together our loans and credit cards, with Digit’s proven and automated savings, investment and banking products,” Vazquez said in a phone interview. “Both our organizations – Digit and Oportun – truly believe that artificial intelligence and mobile technologies in particular can create much better solutions for consumers.”
Shares of Oportun fell 2.4% in New York to $25.29 before the announcement, and have gained about 31% this year. The company sold shares in an initial public offering in 2019 at $15 apiece.
The deal is expected to close late this year or early 2022, Oportun said in the statement. Oportun had applied for a bank charter late last year and decided to withdraw its application, in part because of the potential deal with Digit and the changing business, Vazquez said. He said the company plans to resubmit the application, but has not yet set a date.
Digit’s Bloch said he first met Vazquez a few years ago, helped in part by Oportun board member Jo Ann Barefoot, which hosts an annual roundtable to talk about innovation and regulation. financial. Vazquez and Bloch got in touch earlier this year and started talking about how their companies could work together.
“Savings is usually a kind of ‘eat your spinach’ project. People just say you have to discipline yourself and we have technology today at Digit that can just make that effortless,” Barefoot said in a phone interview.
©2021 Bloomberg LP