Echoes of Simple Deal Found in BBVA’s Acquisition of Holvi

One digital banking tech stack seems to not fit all at BBVA.

That’s seems to be at least one of the strategies in play in BBVA’s decision today to acquire Finnish banking startup Holvi.

Terms of the acquisition were not released.

Holvi is among a group of startups working to “unbundle” traditional banking service, such as peer-to-peer money transfer startup TransferWise and Peter Thiel-backed Number26.

The acquisition follows BBVA deals for Simple and Atom, both similar to Holvi. BBVA paid $117 million for Simple in 2014. More recently, BBVA purchased a 29.5% stake in the British bank Atom for £45 million ($64 million) just one year ago.

Holvi appears as though it will operate in Europe, in some isolation to Simple. In the cases of Simple, Atom and now Holvi, which tends to attract more small businesses as customers, BBVA has made it clear that the ventures will continue to operate as they did before the transactions. That implies BBVA is offering varying tech stacks depending on location. Here’s what Holvi said in response to the deal:

For us BBVA is the ideal owner – a bank with the understanding of the digital world that can give us the necessary room to grow, and then the scale and expertise to underpin that growth with sound foundation […] We’ve found the best possible partner to help us realize our vision and provide our customers with an even better Holvi than ever before. Our home will continue to be in Helsinki and Holvi will remain Holvi.

We surmise that the valuations of Simple and Holvi somewhat plateaued by the time BBVA made its acquisitions, thereby making the deals more palatable for the Spanish bank. Simple’s growth rate seemed to have flattened by the time BBVA made its acquisition. Holvi, meanwhile, has been on the scene since 2011, and has not raised any venture funding since last September. It has also had some turmoil among its management team.

Holvi has raised a total of $4.13 million since its launch in 2011, according to Crunchbase.

This all points to a strategy of BBVA buying startups after their pie-in-the-sky valuations get knocked to reality, and then pushing the acquired company’s product set to its vast customer base of more than 50 million. And since its customer base is actively migrating to digital services, BBVA seems as though it should be able to realize significant return from its acquisitions of startups.