Reports indicate that banking giant JPMorgan Chase has agreed to acquire WePay, a payments startup. This marks the first time that the bank is making a major acquisition in the financial technology sector. According to JPMorgan Chase following the acquisition WePay’s payments technology will be made available to approximately four million small business customers of the bank.
“With WePay, Chase is taking the work out of payments for both our business clients and the software providers who serve them. We are powering payments for growth, so businesses can accept payments instantly, get paid faster, and never lose a sale,” said the chief executive officer of Chase Merchant Services, Matt Kane, in a statement.
WePay was founded in 2008 in Boston, Massachusetts by Bill Clerico, who is also the chief executive officer of the startup. Some of the investors in the startup include Y Combinator, SV Angel, August Capital, Highland Capital Partners and Ignition Partners. Since it was started the total amount that has been raised by WePay is $74 million. During its last fundraising round WePay was valued at approximately $220 million.
Though it was not revealed how much JPMorgan Chase paid for the acquisition it is believed to higher than the startup’s last valuation. Some of the firms that already use WePay include online marketing firm Constant Contact, cloud-based accounting company FreshBooks and crowdfunding site GoFundMe.
The acquisition comes in the wake of JPMorgan Chase disclosing that it would form a partnership with Bill.com in order to have the latter’s automated payments technology added to the former’s enhanced digital platform. Additionally JPMorgan Chase led in a funding round of Bill.com earlier in the month where the target was $100 million. JPMorgan Chase had also earlier in the year announced a collaborative effort with OnDeck aimed at simplifying capital access to small businesses.
In the recent past financial institutions have shown a keen interest in making acquisitions in the financial technology sector. Two months ago, Vantiv, a credit card processing firm, acquired payments processor Worldpay at a price of $10.4 billion. This year approximately 166 deals of this nature worth about $29.3 billion have been closed per Financial Technology Partners, an investment bank.
Reports also indicate that PayPal is keen to make an acquisition. Some of the startups that are believed to be possible targets include Adyen, Stripe and Square. IBM also recently announced that it was deploying Stellar in its international payments solution that is based on Blockchain.