2022 has seen its fair share of mergers and acquisitions in the Fintech world. But the year isn’t over yet; there could be yet another, and this time it’s a Canadian Fintech. A little-known venture stock (TSXV REVO.V) (Frankfurt: IJA2) seems to have caught the attention of both investors, with its almost +40% ascension this past week, and a European Financially Regulated entity allied to a UAE Based Financial Consultancy firm seemingly gunning for a possible control position in the Company.
But what could a fledgling Canadian NEOBANK like RevoluGROUP offer a much larger company? Firstly, REVO has been somewhat of an aberration in the financial world, owning the underlying technology and the valuable financial licenses it operates on. Yes, RevoluGROUP owns, created, completed, and fully paid for proprietary financial technology for iOS and Android platforms called RevoluPAY. This technology is downloadable for free on both platforms and turns the user’s phone into a banking platform. Does this ring a bell for those following the Canadian Governments plan to introduce decentralized Open Banking? So I guess you’re thinking, “so what, there are many phone-based banking apps out there,” and you’d be correct, but in just a few short months, REVO’s users shot up from 5K to 55k, and there seems to be no stopping the meteoric rise in users, so something must be right?
But let’s dig deeper into what else REVO has for a potential suitor. The Company holds a proprietary EU PSD2 banking license covering 27 E.U. countries. Unusual (like the ones few have) addendums to the Central Bank-issued Financial licenses include payment instrument issuance (credit cards etc.) and cross-border payments. It also holds the coveted U.S. FinCEN (Financial Crimes Enforcement Network) approval and a Florida MSB II financial license, guaranteeing necessary access to the world’s largest consumer market. A short while ago, Canadian authorities also granted the Company Federal Registration from FINTRAC (The Financial Transactions and Reports Analysis Centre of Canada). But after scouring the Company’s recent news releases, the plot thickens even further since REVO has quietly signed bilateral banking correspondence agreements with some breathtakingly huge financial institutions. For instance, PNC Bank, USA (Nasdaq: PNC) has a USD 64 Billion market cap. Then there’s USD 46.98 billion Fintech Payment juggernaut WorldPay Inc. (NYSE: W.P.) that signed onto Revo’s tech this year. There are many, but probably the most impressive is their recent August 2022 alliance with USD 386.23 billion VISA Inc. (NASDAQ: V). Shockingly, this Visa partnership flew under the radar in Canada, as did the others.
If you’ve read to this point, it should be pretty apparent that something is afoot here, and it isn’t usually witnessed on a Venture exchange and much less the Canadian one…
RevoluGROUP seems to be on the cusp of something huge and has caught the attention of a financial player. The recently signed tender offer proposal has set a rigid 45-day window for the suitor to put up or shut up before November 28th. Anything could happen, but the market seems in synch with this eventuality. If other 2022 Fintech M&A is anything to go by, there could be quite an impressive upside for shareholders if the deal goes through.