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Another Fintech Is Going Public Through a Blank-Check Company, in a $2.9B Deal
Feb. 12, 2021 5:47 pm ET
MoneyLion will have an enterprise value of $2.4 billion once its merger with a SPAC closes.
Courtesy of MoneyLion
MoneyLion is the latest fintech to go public through a blank-check company.
The digital financial platform said Friday it agreed to merge with Fusion Acquisition (ticker: FUSE), the special purpose acquisition vehicle that is chaired by James Ross, the former chairman of State Street Global Advisors’ global SPDR ETF business. MoneyLion will have an enterprise value of $2.4 billion once the deal closes, which is expected during the first half of the year. The transaction also includes a $250 million private investment from investors such as BlackRock (ticker: BLK) and Apollo Global Management (APO).
The equity value of MoneyLion jumps to $2.9 billion once $350 million from the SPAC and $250 million from the private investment are included, a statement said. MoneyLion will receive $526 million in net proceeds.
Fusion will be renamed MoneyLion and it will trade on the New York Stock Exchange once the merger is completed. News of the sale caused Fusion shares to shed more than 5%, or 63 cents, to close at $11.57 Friday.
Accessing capital markets “allows us to raise awareness of MoneyLion …to the 100 million plus Americans who are disadvantaged through the current financial system,” said Dee Choubey, MoneyLion CEO and co-founder, in an interview.
Launched in 2013, MoneyLion provides products to help consumers save, borrow money, and invest. Its mobile banking product, RoarMoney, lets members get paid up to two days early. The start-up has 7.5 million members. MoneyLion has raised $230 million in funding from investors, including venture-capital firms Edison Partners and Greenspring Associates. MoneyLion shareholders will own about 76% of the combined company once the sale to Fusion closes, the statement said.
The New York start-up will be looking to add more features and products including pay over time and a secured credit card, as well as a cryptocurrency platform that Choubey said will be “done in a safe way.” MoneyLion, which employs 300 people, will also seek to hire, adding 5% to 10% more staff in the short term, Choubey said.
The New York fintech generated $76 million of adjusted revenue in 2020, which it expects will jump to $144 million in adjusted revenue the following year, a statement said.
MoneyLion didn’t consider a sale but it did look at other methods of going public, including a traditional initial public offering and a direct listing, Choubey said. A SPAC is “an efficient way to become public,” he said.
Fusion Acquisition Corp. is the first blank-check company from Ross. Fusion went public in June, raising $350 million. Ron Suber, the former president of Prosper Marketplace and a noted fintech investor, introduced MoneyLion to Ross. Talks between the two parties began in July, Choubey said.
“MoneyLion is at the perfect high-growth inflection point that makes accessing public markets a logical next step,” said John James, founder and CEO of Fusion, in a statement. James is the co-founder and CEO of BetaSmartz.
MoneyLion is the latest fintech to sell to a SPAC. Payoneer is merging with noted fintech pioneer Betsy Cohen’s latest blank-check company in a $3.3 billion deal. In December, Paysafe said it was combining with a SPAC from William P. Foley II, a noted financial services investor, in a $9 billion deal.
Adi Jayaraman of Citi, Greg Phillips of Broadhaven, and Steve McLaughlin of FT Partners provided financial advice to MoneyLion. Davis Polk & Wardwell acted as legal advisor to MoneyLion. John Hall of J.P. Morgan Securities LLC served as financial advisor and lead placement agent to Fusion. Cantor Fitzgerald acted as capital markets advisor to Fusion and White & Case was the attorney Fusion. Citi, Cantor Fitzgerald and Odeon Capital Group also acted as co-placement agents on the PIPE.