Paylocity Acquires Airbase in a $325 Million Deal

Paylocity, a leading provider of payroll and human capital management solutions, has acquired Airbase, a corporate spend management startup, in a $325 million deal. The acquisition marks the second exit for Airbase founder Thejo Kote and signals continued growth in the embedded fintech space.

• The deal, announced last week, is estimated to be valued higher than $325 million, according to industry sources.
• Despite a lower sales price compared to Airbase's 2021 valuation, the acquisition is considered impressive given the company's revenue run rate, which is estimated to be between $14 million and $15 million.
• Paylocity's acquisition of Airbase highlights the growing trend of larger companies integrating fintech solutions into their offerings, with Paylocity now able to provide a comprehensive suite of financial management tools to its clients.

Miami-Based Finally Secures $200 Million in Debt and Equity Funding

Finally, an SMB-focused bookkeeping, accounting, and finance startup, has raised a significant $200 million in a combination of Series B funding and a credit line. The company, which competes with Brex and Ramp, offers expense management, corporate cards, payroll processing, and other financial services.

• The $50 million Series B round, led by unnamed investors, follows a $10 million growth round earlier this year.
• The $150 million credit line provides Finally with additional capital to fuel its expansion and further support its SMB client base.
• The company's growth comes at a time when enterprise fintech is showing signs of recovery, with deal value rising 27.1% quarter-over-quarter in the second quarter.

Venture Capital Funding in the Fintech Space

Venture capital continues to flow into the fintech space, with several new funds and investments announced last week. These investments highlight the continued growth and innovation within the fintech sector, particularly in the areas of embedded fintech, SMB financing, and insurance technology.

• PruVen Capital, a fintech and insurance tech venture fund founded by former Battery Ventures and Citi Ventures VC Ramneek Gupta, has closed a new $378.5 million Fund II.
• Palm, a fintech startup founded by former Uber and PayPal executives, has raised $6.1 million in seed funding led by Speedinvest and Target Global. Palm aims to simplify cash movement for businesses by providing an all-in-one platform for managing multiple bank accounts and subsidiaries.
• Validus, a Singapore-based digital lending platform for SMBs, secured $50 million in debt financing from HSBC. The investment will support Validus's expansion into Indonesia, a key market for SMB lending.
• Drip Capital, a fintech that provides working capital to SMBs, raised $113 million, including $23 million in equity from GMO Payment Gateway and Sumitomo Mitsui Banking Corporation and $90 million in debt financing.
• Ziina, a Dubai-based fintech focused on serving micro, small, and medium-sized businesses in the UAE, raised $22 million in Series A funding led by Altos Ventures.

Other Notable Fintech News

Beyond acquisitions and funding, the fintech space saw several other notable developments last week, including regulatory updates, product launches, and industry trends.

• The FDIC is considering a plan to protect customers from fintech failures, recognizing the growing importance of fintech in the financial landscape and the need for consumer safeguards.
• Agree, a company specializing in agreement automation, has secured $3 million in funding to enhance its platform and expand its capabilities.
• Nubank, a leading digital bank in Latin America, has seen its bad loan portfolio increase as its user base grows, highlighting the potential challenges of rapid expansion in emerging markets.
• PayPal has launched a new in-person payment service with cashback rewards and Apple Pay integration, aiming to compete more effectively in the traditional point-of-sale market.
• Klarna, a Swedish fintech company, is planning to reduce its workforce by 50% and replace some roles with AI, reflecting the industry-wide trend of embracing artificial intelligence to improve efficiency and drive automation.
• Thatch, a Colombian real-time payments startup, has raised $35 million in Series B funding to support its growth in the Colombian market.
• BMO, a Canadian bank, has partnered with Nova Credit to help newcomers establish credit histories, providing access to financial services for immigrants and new residents.