The payments and fintech industries continue to attract significant investor interest. What’s not to like about predictable, recurring revenues, potential uplift from underutilized assets or poor partnering, and a strong M&A environment?

The details matter. Knowing the right questions to ask is just a start. Knowing what the answers should be matters more. We have a process to help with both, starting with the following considerations:

• What is the market opportunity? What’s the addressable market and how well is it being served?
• How sustainable is the position and strong is the differentiation?
• How is leadership approaching the market? Is the company organized for innovation?
• Who are the target’s partners, what’s in each contract, and is there room for margin improvement? Are there new capabilities to leverage? Or better partners available?
• What synergies, if any, are yet to be realized?

Every year, the Glenbrook^TM team takes on multiple engagements with investors looking to expand their portfolios, often with an eye toward synergies with other investments. Examples include:

• We performed a due diligence on behalf of Private Equity investors on companies in the bill payment space, evaluating the strategy, product offering, team, and technology of the target companies. Considerations included the target’s likelihood of success given the market size and the potential impact of market forces (regulatory, systemic, technological, demographic).
• We assisted with due diligence of a payment solution. The company’s investment hypotheses was that the potential acquisition would enhance user retention, drive engagement through regular pay activity, and provide incremental revenue. We provided nuanced perspectives on the relevant market dynamics and market forces that are shaping the industry. Our assessment validated the company’s investment hypothesis and suggested potential partnerships to accelerate growth.
• We assisted a major private equity investor with the evaluation of a technology provider within the payments fraud prevention space. As part of our analysis, we performed total addressable market sizing, assessed the potential growth and market share potential for the target company, and provided insight into the target’s market positioning within the fraud prevention space. We combined a data driven-approach with our broad payments and fraud industry knowledge to create a comprehensive recommendation for the firm’s investment strategy.

Contact us to discuss a Investor Due Diligence project for your company.