January 17

Business-to-business transactions have been stuck in the past: Experts estimate that a stunning 40% of all B2B payments in the US are still made via check, making it a segment ripe for modernization.

American Express intends to acquire Israeli fintech firm Nipendo as it builds out its platform of tools to make B2B payments simpler and more efficient.  

Nipendo’s tools use artificial intelligence to allow businesses to add automation to finding suppliers, making orders, and digitizing and managing invoices (including flagging discrepancies). Businesses will be able to use Amex’s platform to reduce the time and expense of payment processes that were previously paper-based.  

Because American Express already has relationships with both buyers and suppliers, it’s well-placed to dominate the space and create a “Venmo of B2B payments within the Amex platform,” an exec told American Banker. The firm has been building its B2B ecosystem through partnerships for some time: In 2019, it acquired acompay, and in 2022, it partnered with accounts receivable players BillTrust and Versapay. 

American Express and Nipendo declined to disclose the terms of the deal.  

Dealing with issues in trade settlement has historically been a fragmented process, where participants must manually resolve errors over email chains. The biggest players are investing in AccessFintech’s centralized (and secure) data-management network because its collaborative workflows reduce the time and costs for all involved.  

By promising to streamline transaction processing, AccessFintech is winning converts: More than 100 organizations use its platform to share data and BNP Paribas just joined a slew of other top financial firms that contributed to its Series C funding, including BNY Mellon, JPMorgan, Citi, and Goldman Sachs.  

“We are excited to participate in this initiative and help the financial industry evolve its operating model,” a BNP Paribas exec said of the deal.  

By making data exchange and communication easier between all the participants in a given trade, AccessFintech reduces manual work and human error, thus speeding up transactions and lowering overall costs. For example, after a year of using AccessFintech’s network, Citi and JPMorgan reported a 30% reduction in trade fails and a 76% drop in operations-related email traffic. 

AccessFintech provides both regulatory and cost benefits, a spokesperson told Insights Distilled: It “increases efficiency and reduces human error and trade fails – directly impacting revenues and the bottom line.”  

The evolution of Fidelity’s relationship with Shoobx – from partner to parent company – highlights how fintech partnerships can be a good testing ground for deeper connection.  

Fidelity and Shoobx just took their relationship to the next level.  

Fidelity Investments and the equity management firm first began partnering in 2021 to provide financial tools to private companies (Fidelity administers the stock plans of nearly 700 firms, but most are publicly traded).  

“Given the success of our commercial relationship with Shoobx and the increasing demand from private companies to support them as they scale and grow … acquiring Shoobx was a natural next step in our relationship,” Fidelity’s head of workplace investing, Kevin Barry, said. 

The acquisition will allow Fidelity to bake in additional benefits and co-create new tech-related features. For example, with its acquisition, Fidelity will offer automatically created due diligence documents, data rooms for securely sharing confidential business information, and analysis tools for investment planning.  

“The combined Fidelity/Shoobx solution allows start-ups and entrepreneurs to spend less time on administrative needs and more time focusing on growing their business,” a Fidelity spokesperson told Insights Distilled. Additionally, it can “provide peace of mind by reducing unnecessary risk and cost associated with overlooked mistakes and by streamlining processes and making better use of resources.”

This was Fidelity’s first takeover in seven years, following its 2015 acquisition of wealth management firm eMoney Advisor. 

Initial partnerships like Fidelity’s or investments through corporate venture arms gives FinServs a way to test the waters before diving in with an all-out acquisition. For more on that, hear from Synchrony’s head of strategy below…  

To avoid decreasing valuations, late-stage fintechs are more hesitant to go public or raise additional private capital, which creates a great environment for incumbent financial firms to partner with them. 

While there are certainly downsides to the current market conditions, it’s a perfect time for fintech partnerships, according to a top exec at Synchrony, the $15 billion market-cap credit card issuer and bank.  

Late-stage fintechs are putting off IPOs and avoiding new fundraising, which is “leading to a whole set of new opportunities for Synchrony that we wouldn’t have seen one or two years ago,” chief strategy officer Trish Mosconi said during a recent podcast interview with Tearsheet. 

To drive revenue, fintechs are looking for partnerships “in ways that you didn’t see happening previously, because they would have been very focused on their exit,” she said. This creates a “win-win” situation, where incumbents can use these relationships to test new products “to really understand what’s going to stick and what’s not.”  

Beyond traditional partnerships, startups are also more open to strategic investments from corporates, which don’t necessarily create new valuations. Synchrony’s investment arm has 14 active investments and commercial relationships with 7 of those firms. For example, its portfolio company Prove provides identification and authentication for Synchrony’s loan underwriting.  

You can listen to the entire podcast episode here.   

Sustainability continues to be a hot topic for regulators and corporate boards alike. Financial firms have a vested interest in supporting partners focused on building robust, transparent infrastructure for environmental commodities, so they can best support their clients’ ESG goals. 

Bank of America and Goldman Sachs joined a $125 million investment into Xpansiv, which provides market infrastructure and data platforms for carbon credits, renewable energy certificates, and valuing commodities based on their environmental impact.  

Large financial services firms ultimately want to help their clients achieve their ESG goals, which requires mature and robust market infrastructure for environmental commodities. Xpansiv aims to transform a still opaque and fragmented ecosystem with transparency and centralization. By investing in Xpansiv, BofA and Goldman are helping it build out that vision and its platforms.   

 As one Bank of America exec put it, the firm invested in Xpansiv to “support innovation” in voluntary carbon trading and environmental commodities:   

 “Sustainability is part of discussions in boardrooms and with investors,” president Jim DeMare said. “Robust technology, reliable data, and accessible spot markets are crucial to promote liquidity and scale growth” in these “evolving markets.”