Venture Capital: Accel Gets Sweet 4X Returns on $1.2B Galileo Exit
Pandemic or not, the FinTech M&A juggernaut rolls on as SoFi snaps up Galileo Financial Technologies.
It’s the third big one in the fintech space within a space of barely four months. In January, Visa (NYSE: V) acquired Plaid for $5.3 billion, followed by Intuit (NASDAQ: INTU) paying $7.1 billion for Credit Karma in February. In the current deal, personal finance company SoFi is buying up Galileo, a Utah-based financial services API and payments platform, for $1.2 billion in cash and stock. Accel, an investor in Galileo, has reportedly romped home with 4X returns. (Crunchbase)
Accel’s bumper IRR on Galileo
Accel has a history of investing in mostly bootstrapped companies.
Galileo is true to type. Clay Wilkes founded the startup in 2000 and bootstrapped it to profitability since. In April 2014 it raised $8 million led by Mercato Partners.
Last October, Accel led Galileo’s $77 million Series A at an undisclosed valuation.
In effect, therefore, Accel has held its investment in the fintech for just half a year. According to TechCrunch, a source knowledgeable on the transaction claimed Accel generated a 4X return on investment.
Sofi and Galileo
Galileo’s API and payment platform enables financial functionalities including account set-up, funding, direct deposit, ACH transfer, IVR, early paycheck direct deposit, bill pay, transaction notifications, check balance, and point of sale authorization as well as dozens of other capabilities.
The fintech processed over $53B of annualized payments volume in March 2020, up from $26B in September 2019.
SoFi is already a customer of Galileo. So are several global digital banks. These include Chime, Robinhood, TransferWise, Varo, Revolut, and Monzo (also Accel-backed).
“SoFi has established itself as a leader in the fintech sector, providing our more than one million members a full array of financial products to help them get their money right,” said Anthony Noto, CEO of SoFi on the Galileo buyout. “The response by our members to our innovation across borrowing, saving, spending, and investing has motivated us to think bigger, bolder and more expansively given the insatiable consumer appetite for financial services innovation.”
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