Power Finance, Marqeta’s First Purchase, Costs $275 Million

The company that issues credit cards, Marqeta, will buy the company that manages credit card programs, Power Finance, for $275 million in cash.

Marqeta, which reported a net loss of $53 million for Q3 in November, says that the deal will give it a modern technology stack for managing credit card programs.

The acquisition will bring together Power’s next-generation rewards engine and Marqeta’s own rewards innovations. It will also add Power’s data science toolbox and the ability to embed experiences into existing mobile and web apps.

“We already see considerable demand for differentiated credit products from companies looking to innovate in this space who are held back by the constraints of legacy technology,” says Simon Khalaf, incoming CEO at Marqeta. “We thoroughly examined possible acquisitions to more quickly establish Marqeta’s leadership in the modern credit space.”

Power was started in early 2021 by fintech veterans Randy Fernando, who is the CEO, and Andrew Dust, who is the CFO. Since its start in 2021, the company has raised $16.1 million from investors like Anthemis, Fin Capital, CRV, Dash Fund, and Restive Ventures.

As a result of this purchase, Power Finance CEO Randy Fernando will now be in charge of the credit card platform at Marqeta.

Says Fernando: “At Power, we built a full-stack, cloud-native credit card issuance platform, and by becoming a part of Marqeta we have the ability now to bring this innovation to a much larger market at global scale.”

The purchase price is made up of $223 million in cash, of which about a third is paid over a two-year period based on certain conditions, and an additional $52 million in cash based on a milestone that is expected to be reached within the next 12 months.