Two banking technology providers are merging to create a single company that helps banks provide digital loans and open accounts for consumers and small businesses.
Based in Chicago Quantitya spin-off from fintech lender Avant, helps banks such as Barclays, Regions Financial and TD Bank are digitizing account opening, loan applications, credit card applications and more for consumers, as well as buy-it-now/pay-later financing. It acquired Linear Financial Technologies, of Reston, Va., for a purchase price of $175 million in cash and stock, the companies announced Tuesday. Linear supports banks such as Citizens Financial, Fifth Third Bancorp and Huntington Bancshares in the digital origination, onboarding and management of small business loans.
The merger is part of a wave of fintechs buying up other fintechs (even banks) to diversify their offerings and stand out from the competition. Two recent fintech acquisitions made by the Walmart startup Hazelnut and that of Oportun acquisition of Digit are examples.
Amount was attracted to Linear because of the opportunity it gave the company to grow, Amount CEO Adam Hughes said in an interview.
“We’re always looking for ways to be that one-stop-shop platform for banks,” he said. Offering buy now/pay later credit, other consumer products and small business loans under one roof [Amount] an extremely attractive partner for a bank wishing to go digital.
Sam Graziano, CEO of Linear, echoes this idea. “Banking institutions are looking to simplify their vendor portfolios,” he said. “Providing an institution with a broader set of capabilities strengthens your overall value proposition as a software or technology provider.”
Linear will change its name to Amount Small Business in 2022 and Graziano will oversee this division.
In May, Amount announcement that it had raised nearly $100 million in a Series D funding round. The company then began to look more seriously at merger and acquisition opportunities.
Amount has eight financial institution clients; Linear has 12. PNC Financial Services Group is a shared customer. The two CEOs say they have had great success partnering with banks with $50 billion or more in assets that are trying to compete with money center institutions and distance themselves from challenger banks. But they also plan to sue small and medium-sized banks this year.