LONDON, UK: Equals Group plc (AIM:EQLS), a main fintech funds group focused on the SME marketplace, has entered right into a conditional settlement to purchase the entire issued and to be issued share capital of Roqqett Limited, an open banking funds platform, for a full consideration of as much as £2.25 million.
The Acquisition is conditional upon regulatory approval from the Financial Conduct Authority (‘FCA’).
Roqqett is authorised by the FCA as each WWE AISP (Account Information Service Provider) and PISP (Payment Initiation Service Provider), two licences that Equals currently doesn’t hold.
These licences allow Roqqett to carry out the full suite of open banking services, namely, to take funds and entry monetary data. As such, Roqqett can disrupt the conventional methodology of consumers paying merchants, each in person and online, via debit and credit score cards.
Established in November 2019 by Glenn Smith, who beforehand held senior roles with UBS and Barclays in FX Derivatives adopted by over a decade in technology start-ups, the Roqqett team leveraged its significant expertise throughout finance, payments, and disruptive applied sciences to develop the platform.
Roqqett has a proprietary platform, utilising its regulatory licences, that builds on existing payment systems coupled with state-of-the-art APIs with subsequent generation security. Businesses that obtain funds will profit from Roqqett’s platform through a less expensive and faster approach to payment, whereas consumers profit from enhanced security, which outcomes in no card particulars being shared and the use of established biometric approvals already put in on their mobile devices.
In addition to the AISP and PISP licences, the advantages for Equals of this technology fall into three main categories:
· Roqqett enables Equals to participate within the full payment lifecycle for its Corporate and Enterprise customers by including the B2B2B/C leg to the final consumer. Direct account to account funds via Roqqett offers an alternative to debit cards, financial institution playing cards and conventional push payments, giving Equals B2B customers immediate entry to funds despatched by their B2C or B2B customers with a smoother consumer experience. Having this functionality will widen the use-cases and addressable markets for each Equals Money and Equals Solutions.
· The Equals infrastructure, incorporating the own-name IBAN capabilities and direct connection to Faster Payments, will considerably improve the Roqqett proposition on a stand-alone basis. The platform can be sold to retailers as a full end-to-end solution encompassing the ability to course of refunds automatically, a service not typically provided by ‘standard’ open banking integrations with third party financial institution accounts.
· The data capabilities of the technology will allow Equals to make machine-learning-informed, rapid decisions on risk-management for B2B customers who’re on the platform. Equals will have full transparency of the buyer exercise and as such can assess suitability for ahead contracts and carry out enhanced transaction monitoring.
Acquisition consideration will be satisfied by an preliminary £1.0 million money payment (reduced by the quantity of the gross liabilities of Roqqett) adopted by three deferred funds one of as much as £0.25 million satisfied in money (when Roqqett receives the profit of R&D tax credits) and two of £0.5 million, one in money and the opposite satisfied by the issue of ordinary shares in Equals, struck on the five-day volume-weighted common price of 87.23p as of Friday, 25 November 2022.
The second and third deferred funds become due when sure capabilities are added to the platform and are anticipated to be paid in under one year.
The preliminary consideration will be funded from Equals’ existing money resources and the Acquisition is anticipated to be earnings accretive for the Group within the medium term.
For the year ended 31 December 2021, Roqqett had a loss earlier than tax of £0.57 million and had assets of £0.2 million.
Glenn Smith, CEO of Roqqett, said: “Roqqett has developed a distinctive checkout expertise for the quickly rising market in open banking payments. This offering is enhanced with the addition of Equal’s capabilities in IBANs and their membership of the Faster Payments Scheme. The team at Roqqett is looking ahead to working with Equals to maximise the potential for each platforms arising from this Acquisition.”
Commenting on the Acquisition, Ian Strafford-Taylor, CEO of Equals, said: “We are delighted to announce the acquisition of Roqqett and its cutting edge open-banking payment platform and welcome Glenn and his team to the Equals Group.
Similar to the Equals Connect transaction introduced in October, the transaction is made possible by the continued strong efficiency of the Group and our surplus money balances.
“The platform, underlying technology, and licences that we’re buying match well with our stated technique of offering funds options to our B2B buyer base.
The ability to present our company customers with an alternative path to purchase funds from their B2B or B2C customers is the final piece of the jigsaw in phrases of Equals participation within the full payment lifecycle.
This Acquisition permits us to fast-track this functionality which in flip will widen our addressable markets for our services and ultimately drive growth.”