European banking giant, Banco Santander SA, just acquired a major stake in the UK Fintech market. The Spanish bank acquired more than 50 percent of the SME trade and foreign exchange, Ebury, for $453 million. The acquisition is scheduled to close in the first quarter of 2020 and is expected to boost Santander’s global payments business.
The move is nothing new as European banks have been looking to invest in more digital startups to diverse their portfolios. For Santander, Ebury, which operates in 140 currencies in 19 countries, is a unique opportunity since its trading platform is on a global scale comprising small- and medium-size enterprises. The company, which allows customers to trade internationally, will now expand into Latin American and Asia with Santander’s recent investment.
“Small and medium-sized businesses are a major engine of growth around the world, creating new jobs and contributing up to 60 percent of total employment and up to 40 percent of national GDP in emerging economies,” said Ana Botín, executive chairman at Santander, in a recent interview.
She added that Santander is looking to acquire other merchant startups. “SMEs are becoming increasingly global, and Santander is the best-positioned bank to play a leading role to help them access global trade finance,” she said. “By partnering with Ebury, Santander will deliver faster and more efficient products and services for SMEs, previously only accessible to larger corporates.”
Earlier this year, two other banking giants invested in fintech companies. Deutsche Bank bought a stake in Germany’s Deposit Solutions, while HSBC co-led the investment of Britain’s Bud.
Under the Santander acquisition, Ebury will continue to operate as an independent unit, and continue to help further develop companies the Spanish bank has invested in like Brazilian payment company Getnet.
“Combining a big bank with nimble fintech means we can offer our clients the best of both worlds: they can benefit from our technology and high-quality service safe in the knowledge that they are counterparty to one of the world most important financial institutions,” said Juan Lobato and Salvador García, co-founders of Ebury. “It is an exciting time for Ebury, we have just completed our first acquisition, and the new capital from Santander and our existing shareholders will allow us to invest in new ways to serve SMEs trading internationally and continue the growth in our business while keeping our entrepreneurial culture.”