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BBVA acquires digital banking service pioneer Simple

February 20, 2014

BBVA Compass' parent company — Spanish-owned BBVA Group — is acquiring U.S.-based digital banking service pioneer Simple Financial Technology Corp. in a move designed to give it more momentum in its effort to lead the technology-driven transformation of the financial services industry.

Simple, based in Portland, Ore., was founded in 2009 and its commercial launch took place in July 2012. It has grown its customer base fivefold since the end of 2012, now boasting more than 100,000 mostly young, tech-savvy customers across the U.S. The purchase, which values Simple at $117 million, will be completed through BBVA Compass Bancshares Inc.

“This is an exciting day for everyone at BBVA Compass because it ensures we're at the very forefront of our industry's transformation,” said Manolo Sánchez, BBVA’s U.S. country manager and BBVA Compass chairman and CEO. “We won't just witness it, we'll lead it. It's evidence of BBVA's drive to be the bank of tomorrow.”

 

 

BBVA Compass — which already has all-digital offerings with Clear Connect and NBA Banking —will in time help Simple develop new products and services. Simple will continue to operate separately and under the same brand following the acquisition. Joshua Reich, co-founder and CEO, and Shamir Karkal, co-founder and CFO, will lead the 92 Simple employees.

Simple offers digital tools to help manage finances, savings and money transfers through a checking account linked to a debit card. Clients manage the account through mobile and web-based channels. While Simple customers are currently located throughout the U.S., BBVA, with its global network of 30 countries, will help the company expand beyond the 50 states.

“Joining with BBVA gives Simple the resources and global footprint we need to see our vision writ large,” said Reich. “BBVA believes in our vision and the course we have set to transform the industry.”

The move comes just a few months after BBVA Chairman and CEO Francisco González said in an opinion piece in the Financial Times that banks that aren’t prepared for new competition from high-tech powerhouses face “certain death.” “Technology has already transformed many industries,” he wrote. “Next in line is banking. … The rules have changed and a new league of competitors is emerging.”

 

 

In anticipation of the new banking landscape, BBVA created BBVA Ventures, its corporate venture arm. Through it, BBVA is investing in disruptive initiatives in the financial services industry. Its investments include minority stakes in German mobile payments startup SumUp; Freemonee, which analyzes customers' transactional data to create relevant offers from retailers; Radius, a U.S.-based data mining firm that provides business insight into millions of small- and mid-size companies; financial technology-focused venture capital fund Ribbit Capital; and seed-capital fund and incubator program 500 Startups. BBVA Ventures operates in the U.S. through BBVA’s representative office in San Francisco.


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