FinTech: NerdWallet Buys Fundera To Reach Small And Medium Businesses
Fundera has a customer base of over 28 million SMBs.
Financial guidance app Nerdwallet announced Friday its acquisition of Fundera, which provides financial advice and comparisons to nearly 28 million small and medium-sized businesses in the U.S. Terms were not disclosed, except that Fundera will become a Nerdwallet subsidiary. All of Fundera’s employees will join Nerdwallet. (CROWDFUND INSIDER)
The acquisition extends NerdWallet’s market penetration
“Through this acquisition, NerdWallet will expand its financial guidance and financing options for small business owners, establishing a stronger foothold in the SMB market and advancing its mission of providing clarity for all of life’s financial decisions,” NerdWallet said in a statement.
Fundera typically asks its SMBs to file one simple application to get access to a lending specialist. The expert helps to ascertain the best financial options for the business. The SMB gets comparisons and homes in on the best-fit lending product. These services are free until the funding is through. Fundera then collects a percentage from the financial provider that got the deal. The SMB does not pay anything at all to Fundera.
“We’ve always seen tremendous opportunity in providing small business owners with financial information and helping them compare and apply for the financial products that meet their unique needs,” said Tim Chen, Co-Founder and CEO of NerdWallet. “Although we offer free tools and content, we’ve never been able to fully support small business owners — that changes today.”
COVID-19 and difficulties for SMBs
The economic downturn precipitated by the COVID-19 pandemic inflicted severe financial hardships on small businesses in the U.S.
That nearly 70% of these businesses attempted to apply for an emergency loan through the CARES Act’s $349 billion Paycheck Protection Program shows the extent of the problem.
Nevertheless, according to NerdWallet, the SMB market has promising potential for growth that can benefit both companies. However, raising capital is a continuing challenge for small business owners.
“Together we will capitalize on the massive SMB market opportunity while driving great outcomes for small business owners,” said Chen.
NerdWallet said Fundera had deep knowledge of the SMB industry and a record of providing businesses with fair and innovative financing options.
NerdWallet, which is a profitable company, acquired the U.K.-based know Your Money financial comparison site in August 2020 with eyes on achieving a global footprint.
Related Story: American Express Eyeing SMB Lender Kabbage in $850M Deal
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