Four UK fintech brands have decided to merge under the ownership of London-based private equity firm, Exponent.
Open banking provider OpenWrks, as well as Tully – the UK-based debt advice app operated by OpenWrks – will merge with two of Totemic Group’s brands, PayPlan and Paylink.
The merger, the details of which were not disclosed, will see all four companies merge under a new company owned by Exponent, a source tells FinTech Futures.
In the firms’ co-published press releases, it says Exponent will support the merger by providing investment to the newly formed group.
The private equity firm’s portfolio includes brand names Trainline, Quorn, and Moonpig. Its financial investments span UK pensions advisor Isio, tax refunds and multi-currency payments specialist Fintrax Group, mortgage finance provider Enra, and merchant acquiring service Cardsave.
Combining forces for better reach
PayPlan, which has some 159 employees according to its LinkedIn, provides debt advice, and operates on software provided by Paylink.
Paylink, which has a lesser 60 employees, provides software for firms across the lending, collections and banking industries. It claims to serve some 100,000 end users, managing more than £4 billion in debt.
Both these firms are based in Grantham, Lincolnshire. OpenWrks’ and Tully’s offices are based in Nottingham. It’s unclear where the newly established entity will be located.
“The merger will create a new tech-enabled debt advice, financial wellbeing and credit solutions group,” the firms say in their joint statement.
All four firms span the debt advice, credit risk and collections industries, covering both the technology and the customer relationships.
Rachel Duffey, PayPlan’s CEO, highlights that “the demand for debt advice is increasing and there’s also a clear need for better accessibility for vulnerable customers”.
The firms hope to pull their resources and reach more consumers together. Before the pandemic, Money Advice Service estimated some 8.3 million people in the UK sat in debt. And that 22% of UK adults had less than £100 in savings.
By May 2020, another 4.6 million people had accumulated more than £6 billion in debt and arrears. That’s according to financial recovery charity StepChange.
Last September, OpenWrks sold its aggregation platform to Swedish open banking platform Tink. The start-up had built up a connection network of some 3,000 banks since going live in January 2018.
Just a few months earlier, OpenWrks had landed a deal with the UK government to become the Money and Pensions Service’s digital affordability provider.
The deal sees OpenWrks’ MyBudget technology used to make digital affordability assessments, which help companies build bank verified income and expenditure (I&E) budgets.
Currently, the fintech start-up focuses on consumers and businesses with its self-built MyBudget and Money Coaching products.
As part of the merger, OpenWrks plans to develop a suite of solutions around collections, credit management and debt advice.
Susan Rann, Paylink Solutions’ CEO, says the new entity has “a number of software solutions contracts” in the pipeline. But she doesn’t cites the companies involved.