Oportun, Digit Celebrate $213 Million Acquisition

Oportun a consumer credit Fintech, today announced that it has agreed to acquire neobank Digit, a platform that provides automated savings, investing, and banking tools. By adding Digit Oportun will further expand its A.I. and digital capabilities.

“This is a transformational deal that will expand our addressable market, accelerate and diversify revenue growth, and position Oportun for even more future success,” said Raul Vazquez, CEO of Oportun. “In Digit, we are purchasing a proven and scalable neobanking solution that gets us to market three to five years earlier than if we were to build it on our own.”

The acquisition cost is $212.9 million and is comprised of $98.5 million in equity and $114.4 million in cash, subject to customary adjustments. Oportun has obtained a commitment to finance the cash consideration, the company said.

The combined company will result in a neo-banking platform which includes a lending platform, an unsecured credit card with starting lines at $1,000 (and available to customers without a credit score), digital banking with budgeting assistance, automated savings and investing features, and artificial intelligence- and mobile-first consumer platforms.

Together the platforms have 1.4 million members who will see cross-selling opportunities coming their way. They also expect lower customer acquisition costs, higher conversion rates, easier daily engagement, and revenue diversification

Digit said its members can keep and integrate their existing bank accounts into the platform, or they can make Digit their primary banking relationship by opening new accounts via a bank partner. The platform automatically sets aside funds for members by analyzing cash flow and recognizing how much can be saved and invested.

“With this acquisition, we believe we will be able to quickly actualize a bold vision for an A.I.-driven, digital-first platform that helps members daily when they need to borrow, save, invest, and bank,” Vazquez explained. “As a combined company, we will redefine what it means to be a neobank, with outstanding products and service that address the everyday financial needs of hardworking people.”

“Over the past six years, Digit has helped millions of Americans save for everything from emergencies to down payments, vacations and more,” its founder and CEO Ethan Bloch said. “The impact we’ve had on our members is proof that technology can make it easier to live a financially healthy life.

“We have been obsessed with building a financial service from first principles, focused on improving the financial health of our society, all while creating a product and brand that our members love and are willing to pay for. Joining Oportun will accelerate our collective missions and product visions. Together we will create the leading digital platform, grounded in financial health, to serve all of a hardworking customer’s financial needs: from banking, saving, borrowing, investing, and beyond.”

Digit will operate as a business unit within Oportun and continue to be led by Bloch. All Digit employees will join Oportun and continue their job functions. The boards of directors of both companies have approved the transaction, which is expected to close by the end of 2021 or early 2022, subject to the satisfaction of customary closing conditions.

 


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