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Dutch payments group Mollie has agreed to acquire the UK fintech GoCardless in a deal aimed at creating a new €3bn European leader in the fractured sector.
Amsterdam-based Mollie, which has been backed by investors such as Blackstone and EQT, will acquire London’s GoCardless for €1.05bn, their executives said in a joint interview.
The deal, which values Mollie at €1.95bn, will allow the Dutch group to add GoCardless’s focus on bank payments to its existing business offering various financial services including card payments.
The combined group will serve more than 350,000 across both smaller businesses and larger enterprises. Talks began over the summer and the deal is expected to be finalised by the middle of next year.
Hiroki Takeuchi, chief executive of GoCardless, said: “We saw each other’s businesses as very complementary and thought that by bringing those two business together we could create a European powerhouse.”
“Both companies are profitable, both companies have very healthy growth numbers,” said Koen Köppen, Mollie’s chief executive. “We are not looking here to cut costs, we are looking to enhance the product offering.”
The deal, which is more than 90 per cent composed of stock and a small cash component, also underscores a drop in valuation after payments start-ups saw their prices soar during the pandemic-era boom.
Mollie raised about $800mn of funding at a $6.5bn valuation in 2021, when lower interest rates and lockdowns led to a boom in technology investment. GoCardless was last valued at $2.1bn in early 2022.
In the following years, however, rising interest rates have slashed some companies’ valuations. The publicly traded payments group PayPal is now trading at just a fifth of the stock price it notched in 2021.
Köppen, previously chief technology officer at Klarna, the Swedish buy now, pay later pioneer, was familiar with GoCardless from his role as a board member.
He said the deal would help the newly combined company compete for customers by offering a broad array of services to businesses seeking a one-stop shop for payments tools.
“There’s clearly a trend that you want to buy as much as possible from one provider, everything nicely integrated,” Köppen said.
GoCardless’s major backers include Balderton Capital and the group has also raised funding from the likes of Accel and BlackRock.
This article has been amended since publication to correct the deal value