Oportun Financial Corp., a fintech lender, agreed to buy online banking platform Digit to boost its artificial-intelligence and digital capabilities.
Oportun will pay about $212.9 million in equity and cash, it said in a statement. Digit will continue to be led by its founder and chief executive officer, Ethan Bloch, and all of its employees will join Oportun.
The deal will help Oportun expand into online banking three to five years faster than if the company built it on its own, CEO Raul Vazquez said in the statement. Digit, founded in 2013, has about 600,000 paying members and uses artificial intelligence to help consumers figure out how much money they can stash into savings without making it hard to pay bills.
“The combination brings together our loans and our credit cards, with Digit’s proven and automated savings, investing and banking products,” Vazquez said in a phone interview. “Our two organizations — both Digit and Oportun — really believe that artificial intelligence and mobile technologies in particular can create much better solutions for consumers.”
The deal is expected to close late this year or early in 2022, Oportun said in the statement. Oportun had applied for a bank charter late last year and decided to withdraw the application, partly because of the potential Digit deal and how the business has changed, Vazquez said. He said the company plans to resubmit the application, but hasn’t set a date yet.
Digit’s Bloch said he first met Vazquez a few years ago, helped in part by Oportun board member Jo Ann Barefoot who hosts an annual roundtable to talk about financial innovation and regulation. Vazquez and Bloch touched base earlier this year and began talking about how their firms could work together.
“Savings is usually sort of an ‘eat-your-spinach’ project. People just say you have to discipline yourself and we have technology today at Digit that can just make it effortless,” Barefoot said in a phone interview.