Interesting that there has been no less than 4 deals in virtually 6 months in the SME lending space - starting with the deal back around July 20 ,2020 with the US Fintech Enova's US $90 million cash and script offering for OnDeck US who is the 55% owner of OnDeck Australia with KKR's MYOB now owning the remaining 45% .
This follows the announcement a week earlier of the CML Group who entered into an agreement with online invoicing and finance provider Skipper who is set up to specifically target small businesses with receivable books below $200,000.
Then there was Grow Finance who also offers a range of SME finance products who completed its acquisition of Australian Invoice Finance 1 month later in July 2020.
So I think it's no mistake that XERO also made with its FIRST move in this area a month after that in August 2020 with the A $80 cash and script acquisition of Waddle ....another Invoice lender who apparently already leverages it's business invoice lending and lines of credit off the accounting data Xero , MAYOB , and Intuit's Quickbooks platforms . ( refer attached link for the full read of this transaction )
Then there is Capify who can be seen to be referencing the Australian Market in the other attached link below , and who seems to be currently sitting on the sidelines as the ' One Out ' who is still running the rule over potential M&A synergies in this SME lending space.
So for me , the above obvious purposeful Industry posturings are clear evidence of BOTH the strength and importance of the FISERV agreement and the connections to KKR with it's FULL ownership of the MYOB customer base and its 45% ownership of SME lender OnDeck Australia .
As a result , I am definitely looking for KKR to act on these connections with relative speed to take advantage of it's comparative strengths and position in this fast growing lending sector.....and it is for this reason , I will be looking for some sort of ' Deal ' on this front together with perhaps a card launch to accompany their initiatives early in the First Quarter of 2021.
Because if something doesn't happen sooner than later , they will definitely look to have lost the critical momentum necessary to keep themselves at the head of the pack on these offerings. And with XERO already near completion of it's FIRST deal in this area together with the rumoured KKR offer for the 55% remaining interests from OnDecks new US Parent Enova. So I will definitely be looking for some ' official ' agreement and tie-up to MYOB's highly valued customer base to OnDecks finance offering together with Cirralto's Corporate card offering and SPENDA's IP and interactive payments and Ledger settlements platform.
Interesting that Enova ( new parent of US OnDeck ) is only valued at just under US $1 Billion ....so maybe KKR takes out the lot as they are not particularly known for being satisfied with a Minority stake - so anything is possible I guess. Either way , if they were to move on Ondeck or announced a' Buyout ' of the Australian Division and put that together with it's already 100% owned Pepper Financial as well as Latitude Financial - this would absolutely put a rocket under the Cirralto SP by solidifying the wider business strategies and plans of KKR......and us .
So I look forward to a lot of this playing out sooner than later with the SP preempting these moves in the New Year 2021.
(20min delay)