Raleigh-headquartered banking solution startup Constellation Digital Partners purchased Durham-based fintech startup WalletFi, the two companies announced yesterday.
The intra-Triangle acquisition brings WalletFi’s subscription management platform and transactional analytics into Constellation’s growing transactional data intelligence offerings within its own platform.
At WalletFi’s inception, Co-Founder and CEO Marc Miller said the startup aimed to help individuals manage their recurring payments and subscriptions, like Netflix or Spotify. (We first profiled WalletFi in December, 2018.)
However, along the way, they pivoted from B2C to B2B, working directly with financial institutions to share the power of transactional data from their subscription management.
That pivot is what brought Miller together with Kris Kovacs, Constellation’s CEO, at a Carolina FinTech Meetup at the Wells Fargo Tower in downtown Raleigh four years ago. Constellation helps credit unions and community banks launch scalable digital banking services.
“It’s been a long partnership,” said Miller, “a prosperous one of two local startups within the Triangle ecosystem working together. We saw this divergence of how WalletFi can be brought to the (Constellation) platform to impact the entire ecosystem of not only the credit unions but the community banks that we serve as well.”
Kovacs said that in Constellation’s pursuit of providing community-based financial institutions a new model of accessing and implementing the latest fintech innovations, they continuously saw a greater need to gain more intelligence from transactional data.
That wasn’t a core competency that Constellation Digital Partners held, he said, but WalletFi’s technology fit perfectly into the gap that clients were missing.
“From an operational perspective, we intend to really focus on making it as seamless for WalletFi customers and for Constellation customers as possible, as we draw the roadmap that pulls those two products together,” Kovacs said.
All WalletFi employees will come on board to Constellation’s team as part of the acquisition. Also as part of the deal, Miller will be Constellation’s newly anointed Chief Revenue Officer.
Miller said WalletFi wasn’t necessarily looking for an acquisition when conversations with Constellation started, but they were remaining open to the best opportunities. Previously, the startup raised $1 million, according to Crunchbase.
“There really are partnerships that make sense and are better together as one, as opposed to continuing to operate as separate entities,” Miller said. “When we made the decision to go with Constellation it was, does it align with our values?”
The answer was a resounding yes.
“It was, do we want to go down a path of raising capital? Or do we want to become part of something bigger and scale that way?” Miller said. “That’s why we’re here. We chose that path because to us, it made a lot of sense to our customers, investors, employees and the board.”
Ultimately, Kovacs said the acquisition will enhance Constellation’s digital service offerings and improve their ability to work with community-based financial institutions in new and exciting ways.
“We believe in the power of community-based banking, that people making loan decisions should live in the same communities as the people borrowing,” Kovacs said. “That’s so important to the economy and so important to the well-being of those communities.”
He added, “That’s our call to action, to provide those really great experiences that consumers need so that they can operate without having to access this noise of applications that are out there in the greater marketplace.”
