M&A Financial Institutions: Consumer Finance | White & Case LLP



Trends in the financial institution mergers and acquisitions sector: consumer credit – H1 2021 and outlook for H2 2021

The hyper-specialization of the European consumer credit market continues, with POS, entrepreneurs, freelancers, migrants and payroll financing companies securing growth capital in the first half of 2021.



  • Moderate increase in M&A activity


  • Established lenders consolidate amid disruption caused by niche competitors (e.g. Crédit Agricole’s acquisition of the remaining 49% of SoYou)
  • Consumer lenders embrace digital currencies (e.g. Uphold’s acquisition of Optimus Cards UK)
  • UK Payday Loan Victims Rise During COVID-19 Pandemic – Uncle Buck, MyJar, Peachy and Sunny Payday Collapse in Administration


  • Hyper-specialization of the European consumer credit market, the niche conquerors attract investments in the first half of 2021:
    • POS (for example, Divido Series B US $ 30 million fundraiser)
    • Entrepreneurs (for example, the $ 80 million Venture fundraiser from Uncapped and the $ 13 million Venture fundraiser from Memo)
    • Freelancers (e.g. Lili’s US $ 55 million Series B fundraiser)
    • Payroll (for example, Check’s US $ 35 million Series B fundraiser)
    • Micro-enterprise (for example, Albert’s US $ 100 million Series C fundraiser)
    • Mass Wealth (e.g. Monument Series A £ 28million fundraiser)
    • Migrants (for example, Rewire’s US $ 20 million fundraiser)
  • The importance of e-commerce drives BNPL’s growth:
    • Inorganic growth (e.g. acquisition of Returnly by Affirm)
    • Organic growth (e.g. Klarna launched UK installment loan app in New Zealand)
    • Successful fundraising (for example, Resolve and Butter have both successfully raised growth capital)


  • European regulators are turning to the “Treat customers fairly” imperatives:
    • Europe: European Central Bank slams European banks for instant payment fees
    • UK: Charge by the payment systems regulator of Mastercard, allpay, APS, PFS and Sulion of operating a prepaid card cartel


The hyper-specialization of the European consumer credit market will continue – customer demand for products tailored to their specific needs is increasing. Payday loans are fading even more from memory (at least in the UK).

Consumer Financing — Publicly Reported Cases and Situations

Good appetite for buyers / investors

  • Crédit Agricole (Consumer credit): Acquisition of SoYou (June 2021)
  • Financial Services Capital Partners (Consumer credit): Acquisition of JZ Lending (May 2021)
  • Brocc (Credit and savings): Acquisition of GCC Capital (May 2021)
  • Maintenance (crypto-activated cards): Acquisition of Optimus Cards UK (February 2021)

Small lenders grow their pipeline

  • Royal London (exit from shares): Acquisition of 30% of Responsible Group (March 2021)
  • Cashplus (bank accounts): Acquisition of icount’s current account portfolio (January 2021)

BNPL in the spotlight

BNPL programs are expected to account for 10% of all e-commerce sales in the UK by 2024 and are expected to be worth £ 264 billion, a 37% increase from 2020. Finextra (February 2021)

Britain’s FCA to introduce new rules for BNPL companies amid growing fears of a growing debt burden on cash-strapped buyers. Finextra (February 2021)

Inorganic growth:

  • Affirm (BNPL): Acquisition of Returnly (April 2021)


  • Solve (BNPL): $ 60 million successful fundraising round (May 2021)
  • Butter (BNPL): Successful £ 15.8million fundraising round, led by Blenheim Chalcot (March 2021)

New offers:

  • Klarna (BNPL): Launch UK shopping app that allows users to pay in three installments (June 2021)
  • Klarna (BNPL): Launch in New Zealand (April 2021)
  • Barclays (BNPL): Launch of the American BNPL white label service (April 2021)
  • Tinkoff (BNPL): Launch of the Dolyame.ru service (April 2021)
  • Zilch (BNPL): Launch of the “Tap and Pay-over-time” feature (April 2021)
  • Affirm (BNPL): Debit card launch (February 2021)

Growth of the partnership model

  • General Motors, Goldman Sachs and Mastercard (Consumer credit): Reward-Based Co-Branded Credit Cards JV (January 2021)

Small consumer lenders are building up firepower

  • Divido (POS financing): Successful US $ 30 million Series B financing round led by HSBC and ING (June 2021)
  • Uncapped (entrepreneur finance): Successful $ 80 million fundraising round, led by Lakestar (May 2021)
  • Lili (Independent banks): Successful USD 55 Million Series B Funding Round Led by Group 11 (May 2021)
  • Ramp (Corporate credit cards): Successful US $ 115 million Series B financing round led by D1 Capital Partners and Stripe (April 2021)
  • TomoCredit (Consumer credit): Successful $ 7 million seed funding round led by Barclays (February 2021)
  • X1 (Consumer credit): Successful US $ 12 million Series A financing round led by Spark Capital (January 2021)
  • Check (payroll financing): Successful US $ 35 million Series B fundraiser led by Stripe and Thrive (January 2021)
  • Albert (Mobile bank): Successful US $ 100 Million Series C Funding Round Led by General Atlantic (January 2021)

Mandatory TCF regulator

  • European Central Bank : Criticism of European banks on instant payment fees (May 2021)
  • UK payment systems regulator: Charge of Mastercard, allpay, APS, PFS and Sulion of operating a prepaid card cartel (April 2021)

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