Friday Finance (founded as Airbank) wanted to digitize the financial processes of small and medium-sized enterprises with a multi-banking solution. Despite good funding and major expansion plans, the fintech has now surprisingly ended its business – and is selling parts of the company to competitor Pliant, FinanceFWD reports. The transaction is not said to be a “fire sale” and was not driven by Friday Finance‘s financial difficulties. This may or may not be the case.
The Friday Finance Transaction
Friday Finance founders Patrick de Castro Neuhaus and Austrian Christopher Zemina have decided to sell their startup Friday Finance to larger competitor Pliant. They will join Pliant in management positions, and many employees are also expected to transfer or already have. Friday Finance has already shut down its operations. The fintech, which focused on improving the financial organization of small and medium-sized businesses, struggled with the difficult market environment. Inflation, rising costs and high interest rates have greatly affected the company’s core target audience.
Friday Finance‘s founding team will continue in leadership roles at Pliant, while the Friday Finance brand will disappear. Pliant will streamline Friday Finance‘s broad product offering and focus on corporate credit cards. Friday Finance investors are said to have been compensated with cash and Pliant shares in the deal, at a valuation of just over 100 million euros.
Friday Finance had raised more than €27 million to date. Investors included the likes of Molten Ventures, New Wave, SpeedInvest, Another VC and Entrepreneur First. The startup did not want to become a bank itself, but allowed customers to connect their existing bank accounts to the platform.
Really? No Firesale But Strategic Move
The sale is not said to have been driven by any financial distress on the part of Friday Finance and thus was not a “fire sale”. A large part of the funding in the amount of approximately 15 million is said to still be left in cash reserves. As recently as last year, Zemina announced that growth had exceeded all expectations and secured $19 million in Series A financing.
However, the fact that the Friday Finance website is already offline casts slight doubt on the “no fire sale” statement.
All Fiday Finance invstors, as well as the two founders, received a mix of cash and shares in Pliant based on a valuation of just over €100 million. The big exit success story has thus (still) failed to materialize for the fintech but , streamlining the business and merging with a competitor due to the changed market environment could ultimately turn out to be positive for investors and founders.
Pliant, on the other hand, has recently been able to increase its valuation despite difficult market conditions. As recently as February, the Berlin-based fintech raised around €26 million in a financing round. The Series A round was led by Japanese financial investor SBI Investment, followed by Alstin, and MS&AD Ventures from San Francisco.
It will certainly not be the last acquisition in the FinTech scene. Selective acquisition of competitors will be a key part of strategic business development for the larger FinTechs over the next 18 months.
Share Information
If you have any information about Friday Finance, Pliant or any other FinTechs, please let us know through our whistleblower system, Whistle42.
