Integrated finance continues to be the engine driving fintech growth, with a group of companies building core banking, payments, and other financial technologies, and a much larger group leveraging that technology through APIs to build customer-facing businesses. . Today, one of the biggest players on the core technology side, Global Processing Services, announces $100 million in financing, a sign not only of how popular embedded finance remains as a business, but also of GPS’s traction in space.
Singapore investor Temasek and US firm MissionOG are the only two investors in this funding tranche, which comes in the form of an extension of a $300 million investment GPS announced in October 2021, closing the entire round at $ 400 million. Advent International and Viking Global Investors co-led that earlier round, giving them a majority stake in GPS. As with the previous part of the round, GPS, which is based on the Isle of Man in England, does not reveal its valuation today.
The funds will be used to further grow GPS’s business, which includes a range of fintech services such as payments, direct debits and standing orders; virtual cards; mobile wallets; fraud prevention; Expense management; cryptocurrency management; BNPL and more (these are sold under the GPS Apex brand).
Specifically, the company wants to further expand in Europe and Asia Pacific, as well as more emerging markets in the Middle East and Africa; and wants to bring new products. (Notably, there are no loan products in the mix at the moment, so that might be one area you explore; insurance might be another, and also solutions tailored to specific verticals.)
The reason for the investment and investor attention is that GPS and the space in which it is active have seen a huge increase in activity. On the one hand, neobank services among consumers and businesses have been increasing in popularity (and credibility); on the other hand, we have seen a growing range of non-fintech businesses (such as telcos and retailers) leveraging the concept of integrated finance to add new features and revenue streams to their own platforms.
More broadly, consumers and businesses made a big shift to conducting all of their financial activities online when the Covid-19 pandemic gripped the world, and even if that subsides, it looks like they won’t be fully returning to their home. analogous forms. That has had a ripple effect on venture funding for the entire fintech industry. Just yesterday, another big fintech player, payment startup Checkout, raised a whopping $1 billion at a $40 billion valuation.
GPS itself primarily targets those who work more directly in fintech, with clients like Revolut, Starling, Curve, Zilch, and Paidy. It said its services are now used in 48 countries and last year it processed more than 1.3 billion transactions, with 190 million cards issued to date.
“GPS is an innovative technology company, and we believe their unique position at the heart of the global payments ecosystem ideally positions them to power the next generation of financial services,” Gene Lockhart, general partner at MissionOG, said in a statement. “With the deep network and experience that MissionOG brings to the table, we look forward to being a trusted and valued partner for Joanne and the entire team.” Notably, Lockhart is taking on a role as chairman of GPS with this investment.
“The extension of this latest investment round is an important step forward for the company and a strong endorsement of our strategy,” added Joanne Dewar, CEO of GPS. “We are a company that has grown rapidly in recent years, fueled by our commitment to innovation and delivering a single, scalable technology platform. The experience our new partners bring to GPS will be invaluable as we enter our next phase of geographic expansion and technology innovation.”