Walmart-Backed Fintech Startup Is Acquiring Two Firms and a New Name
The startup, to be called ONE, is helmed by former Goldman executives and aims to build a ‘financial services super app’
The Walmart-backed fintech startup will use the ONE brand after acquiring Even Responsible Finance and ONE Finance.PHOTO: JEFFREY GREENBERG/UNIVERSAL IMAGES GROUP/GETTY IMAGES
By
Sarah Nassauer Follow
Jan. 26, 2022 7:20 am ET
The financial-technology startup backed by Walmart Inc. said it plans to purchase two small firms and launch under a new brand.
The firm, helmed by two former Goldman Sachs Group Inc. executives, will buy Even Responsible Finance Inc., which is used by employers to offer workers their paychecks early and counts Walmart as a large customer. It will also buy ONE Finance Inc., a financial-services mobile app known as a neobank that allows users to manage money and apply for a debit card or other services that come with lower fees than traditional banks typically charge.
Walmart is the majority owner of the firm under a joint venture with Ribbit Capital, known for investing in Robinhood Markets Inc. and other digital financial businesses. After the acquisitions, the startup will use the ONE brand, the firm said in a statement. Even and ONE had a combined valuation of around $400 million during their last fundraising rounds, according to people familiar with the situation.
ONE aims to become a one-stop shop for a range of mobile-based financial services that appeal to customers from a variety of socioeconomic groups, said Omer Ismail, chief executive of the firm and former head of Goldman’s consumer-banking unit called Marcus. Mr. Ismail said the partnership with Walmart offers a huge potential customer base, with around 1.6 million U.S. employees and over 100 million U.S. shoppers a week, he said. The startup’s position outside the corporate structure of the retail behemoth will allow it to grow quickly, he said.
“The strategy is to build a financial services super app, a single place for consumers to manage their money,” he said. The acquisitions are expected to close in the first half of this year, the company said in a statement. The firm will have about $250 million of cash on hand after the acquisitions, according to the statement.
Big banks have been monitoring Walmart’s entry into financial services, wary of its giant reach and opportunity to build from scratch. The departure of Mr. Ismail from Goldman, where he was a fast-rising partner, to run the fintech firm added to the intrigue across Wall Street.
The venture is part of Walmart’s wider effort to build new sources of profitable revenue beyond selling goods, mirroring Amazon. com Inc.’s model of making money selling cloud-computing services and advertising.
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