The two FinTechs announced the deal Thursday (Dec. 15), with GoLogiq, a consumer data platform, acquiring GammaRey, a financial solutions platform, for $320 million. According to a news release, the combined company will initially focus on wealth management for younger consumers, followed by the launch of digital payment platform for the sharing economy.
The companies say their combined forces will help them provide services to younger consumers, who have seen their assets rise from $2.9 trillion to $3.6 trillion.
“Given the tremendous opportunities for growth in wealth management, the time has come to address the market on a larger scale through this highly synergistic merger,” GammaRey CEO Timothy Alford said in the announcement.
GoLogiq CEO said Matthew Brent the acquisition will help his company realize its vision of becoming “a comprehensive fintech platform for underserved businesses and consumers.”
Younger consumers are among that underserved cohort, David Dindi, CEO at global investment firm Atomic, told PYMNTS in August.
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“Most of them have felt that investing is not for them because the traditional investment providers such as large brokerage houses and asset managers haven’t made a significant effort to appeal to them, as they’ve not been viewed as substantial clients,” Dindi said.
On the other hand, FinTechs, neobanks and other consumer-facing businesses have realized the potential customer base these younger customers offer. However, they come to the investment services scene with extremely limited resources.
“Typically, the obstacles that companies face, especially those that have already established a trusting relationship with their customers and are looking to offer investing services, is that investing is a complex, highly regulated activity that requires significant build out,” Dindi added.
Younger consumers are also more financially literate, PYMNTS wrote recently. They are more aware of the financial mistakes older generations have made in taking on too much credit card debt, Copper CEO Eddie Behringer told PYMNTS’ Karen Webster.
“They’re ready to learn from what the data is telling them,” he said, adding that “this is a generation that has really bought in to knowing where they are spending and how they are spending.”
