Tag: MasterCard

Breaking up the M&A way

Ben Kolada

Contact: Ben Kolada

Though previously engaged in a joint venture (JV) named Monitise Americas, mobile banking startup Monitise and Fidelity National Information Services (FIS) have been growing apart. Through a series of moves, the two companies, though still partners, seem to be getting ever closer to completely severing their relationship.

The eventual breakup appears to be spearheaded by Monitise. For just over three years, Monitise and FIS owned a JV named Monitise Americas. However, in November 2011, Monitise brought the JV completely under its own control, perhaps as a prelude to its next major M&A play.

Following the severing of that venture, FIS threw its weight behind Monitise competitor mFoundry, participating alongside MasterCard and existing investors in an $18m round of financing for mFoundry that was disclosed in December 2011. Not only was FIS’s involvement here a competitive slap in the face, but the inclusion of MasterCard in the round put another nail in the coffin, as MasterCard rival Visa and its affiliates have been longtime investors in Monitise.

In response, just three months later, Monitise announced its $173m all-stock acquisition of North American counterpart Clairmail. Clairmail was a direct competitor to mFoundry, similar in both headcount and product portfolio.

With tension mounting, FIS recently announced that it is acquiring the remainder of mFoundry that it doesn’t already own for $120m in cash. If the relationship between FIS and Monitise continues, it certainly won’t be as amicable as before. Although Monitise still called FIS a partner in its most recent annual report (released in September 2012), the feeling may no longer be mutual.

Breaking up the M&A way

Date Event
November 2011 Monitise buys out the remainder of Monitise Americas that it didn’t already own from FIS.
December 2011 FIS invests alongside MasterCard in Monitise competitor mFoundry.
March 2012 Monitise acquires mFoundry rival Clairmail for $173m.
January 2013 FIS acquires the remainder of Monitise/Clairmail competitor mFoundry that it didn’t already own for $120m.

Source: The 451 M&A KnowledgeBase, 451 Research

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Buying your loyalty

Ben Kolada

Contact: Ben Kolada

Gannett Co announced on Thursday the acquisition of Mobestream Media, maker of the Key Ring customer loyalty application. The deal is one of only a handful of mobile rewards and loyalty purchases announced so far, but as the market matures, we expect that many startups will be acquired and tucked into larger digital marketing vendors’ portfolios.

Like its pickup of social media marketing startup BLiNQ Media last month, Gannett bought Mobestream to build out its digital marketing portfolio. Mobestream’s Key Ring app allows smartphone users to store and receive merchant loyalty card information and digital coupons. The company’s retail customers also use its platform for marketing campaigns. So far, more than five million users have downloaded the app. Horizon Partners advised Mobestream on its sale (this is Horizon’s fifth M&A deal this year, but won’t be its last).

Because the mobile loyalty sector is still so young, there have only been a few acquisitions. However, there are more than a dozen startups operating in this sector, and purchases by Gannett and Constant Contact suggest that their products are better suited as part of a larger digital marketing portfolio.

As the mobile loyalty market matures, the leading startups will likely become acquisition targets for larger tech marketing vendors and publishers such as Google, Vocus, Teradata and Advance Publications. Several startups have already secured funding to propel their growth. In May, RewardLoop announced a $1m series A round, Beintoo took $5m in its A round and Belly secured $10m in its series B. Kiip followed in July with an $11m B round.

Select mobile loyalty M&A

Date announced Acquirer Target
September 7, 2012 MasterCard Truaxis
September 6, 2012 Gannett Co Mobestream Media [dba Key Ring]
January 19, 2012 Constant Contact CardStar
December 8, 2011 Plum District Chatterfly
July 8, 2011 Google Punchd Labs
November 9, 2010 Angoss Software Hitgroup.ca (mobile solutions assets)

Source: The 451 M&A KnowledgeBase

For more real-time information on tech M&A, follow us on Twitter @MAKnowledgebase.