At the start of 2022, one of the most hotly anticipated deals in the fintech world was the acquisition of robo-advisor startup Wealthfront by the Swiss bank UBS. The $1.4 billion deal was expected to bring a major influx of capital to Wealthfront while beefing up the digital power of a traditional banking giant.
Yet for all the hype among fintech insiders, Wealthfront quietly announced in a blog post in early September that the acquisition was now a much smaller $69.7 million investment. The blog post was optimistic about the investment, and insisted that the deal’s collapse was by “mutual agreement,” but it’s hard to ignore the significance of this move, especially amid high-profile worries about looming regulation.
“The deal collapse came suddenly,” said Dan Primack writing for Axios, “as reflected by Friday night’s terse announcement, with unspecified regulatory concerns being raised in just the past several weeks.”
Indeed, creeping regulation from government bodies has dramatically changed the mood in fintech markets. Last year, Visa’s planned acquisition of Plaid fell through for similar reasons, and though that deal’s failure might have been to the benefit of both companies, it looks increasingly certain that banks and fintechs cozying up is less of a sure-fire success than a way to draw attention from regulators.