Marqeta Inc. today announced plans to acquire Power Finance Inc., a financial technology startup that exited stealth mode last year, for $223 million in cash.

Marqeta will pay an additional $53 million if an undisclosed performance milestone is met following the deal’s completion. Power Finance is expected to reach that milestone within 12 months. Prior to the acquisition, the startup raised $16.1 million in seed funding from investors along with a $300 million credit facility.

Oakland, California-based Marqeta listed its shares on the Nasdaq in 2021 through an initial public offering that raised $1.2 billion. It operates a platform that enables companies to issue branded payment cards to their customers and employees. It generated revenue of $192 million in the third quarter, 46% more than the same time a year earlier.

New York-based Power Finance likewise focuses on the payment card market. Founded in 2020, the startup has developed a platform that enables companies to develop rewards programs for the branded payment cards they issue to their customers. According to Power Finance, its platform makes it possible to align rewards with customers’ shopping preferences to increase user retention.

The startup also provides several complementary tools. As part of its platform, Power Finance offers a dashboard that enables companies to track metrics such as the number and value of transactions made using their branded payment cards. Built-in marketing features can be used to deliver customized promotions to cardholders.

Power Finance offers its platform alongside an array of professional services. The startup can help companies design a payment card, launch marketing campaigns and develop a customer retention strategy. Furthermore, it can provide technical support to a company’s cardholders on its behalf.

Marqeta will integrate Power Finance’s technology with its payment card issuing platform after the acquisition completes. According to Marqeta, the startup’s tools for building rewards programs will help companies bring more competitive payment cards to market. 

“We thoroughly examined possible acquisitions to more quickly establish Marqeta’s leadership in the modern credit space,” said incoming Marqeta Chief Executive Officer Simon Khalaf, who was appointed to the top post earlier this month. “It became clear to us that Power would strengthen Marqeta’s platform with a best-in-class tech stack for credit card program management.”

Marqeta’s platform is used by financial technology startups to issue payment cards to their users. It also enables companies to issue corporate credit cards to their employees. Online retailers, for example, use the company’s platform to help employees more easily purchase merchandise from suppliers.

The acquisition of Power Finance is part of a broader effort by Marqeta to expand its focus beyond the payment card issuing market. Previously, it expanded into the banking technology segment by launching a product suite dubbed Marqeta for Banking. The product suite promises to help companies develop financial services such as deposit accounts with less time and effort than the task usually requires. 

Image: Marqeta