Open banking fintech Raisin has agreed to acquire its long-time service bank, the Germany-based MHB Bank, from an affiliate of US finance investor Lone Star for an undisclosed price.
Image: Raisin CEO and co-founder Tamaz Georgadze. Photo: courtesy of Raisin GmbH, Berlin.
Established in 1973, MHB Bank offers transaction, fronting and service bank with full banking licence in Germany. The Frankfurt-based bank also provides customized lending and deposit-taking solutions along with cross-border services using EU passport arrangements.
Raisin expects the acquisition of the German bank to help expand its areas of operation and also its value chain.
In addition to Raisin, MHB Bank has been a service-banking provider for German fintechs like Exporo, Bergfürst and CreditShelf.
The German Bank handles aspects of the value chain pertaining to customer identification, account management and financial transactions.
Raisin, on the other hand, calls itself as a pan-European fintech marketplace for savings and investment products.
Both the companies after completion of the transaction are expected to develop better solutions for partners and consumers alike in Europe.
Raisin CEO and co-founder Tamaz Georgadze said: “As one of the leading fintechs in Europe, we believe in making sustainable changes to the financial system in order to make the needs of customers and partners paramount. Together with MHB, we can continue to develop — and seamlessly integrate — the services we offer customers, partner banks and distribution partners.”
Raisin said that in the last few years, it has grown its services to customers and banks to a great extent, especially when it comes to the range of offers and the availability of its products across the European Economic Area (EEA). The German fintech expects the new acquisition to accelerate the growth in these aspects.
Raisin also expects to optimize the onboarding process for deposit banks and distribution partners such as o2 Banking of Telefónica Germany and N26.
MHB Bank chairman Reiner Guthier said: “We know the business models and challenges of both sides, fintech and bank. Through this more extensive collaboration with Raisin we will be able to add to our technical expertise along with making important investments in our team.
“These changes enable MHB even better to support the digital business models of our current partners as well as new ones. This move thus allows us to take the strengths of our current position in credit fronting and expand them further into payments and ‘banking as a service’.”
Closing of the transaction is subject to final approval by German Federal Financial Supervisory Authority (BaFin) and the European Central Bank (ECB).
Earlier this month, Raisin closed a Series D funding round of $114m from its existing investors including Index Ventures, PayPal, Ribbit Capital and Thrive Capital.