California-based fintech Oportun is to acquire neobank platform provider Digit as it looks to expand its AI and digital capabilities.
Digit provides automated banking tools
Oportun will pay approximately $212.9 million, comprising $98.5 million in equity and $114.4 million in cash.
Digit was founded in 2013 and has 600,000 paying members. It provides automated savings, investing, and banking tools.
Digit members can retain and integrate their existing bank accounts into the platform or make Digit their primary banking relationship by opening new accounts via Digit’s bank partner.
Oportun’s AI-driven platform offers credit to people often excluded from the financial mainstream. Set up in 2006, it has disbursed more than 4.3 million loans. Adding the Digit members will bring a combined 1.4 million active members.
Raul Vazquez, CEO of Oportun, says: “In Digit, we are purchasing a proven and scalable neobanking solution that gets us to market three to five years earlier than if we were to build it on our own.”
Ethan Bloch, founder and CEO of Digit, adds: “Joining Oportun will accelerate our collective missions and product visions.”
Digit will operate as a business unit within Oportun and continue to be led by Bloch. All of Digit’s 100+ employees will join Oportun.
The boards of directors of both companies have approved the transaction, which is expected to close by the end of 2021 or early 2022.