PayPoint has made a further investment of £10.5 million in Open Banking technology platform Obconnect, following a minority investment in July 2022.
The new investment takes PayPoint’s interest to 59.3% of the company, giving it a majority stake in Obconnect.
The investment comprises the £3 million original convertible loan note, which will now be converted into ordinary shares, along with a new investment of £10.5 million in cash.
As part of the agreement, there is an option for PayPoint to obtain the remaining 40.7% of Obconnect for a total cash amount of up to of £20 million, dependent on performance.
The put option is exercisable over three annual instalments from 31 March 2025, with up to 10% puttable by March 2025, up to 25% by March 2025 and up to 40.7% by March 2027.
Since its initial investment in 2022, PayPoint has been able to leverage Obconnect’s technology platform to offer Open Banking services to both new and existing clients.
At the Open Banking Expo Awards 2023, PayPoint and Obconnect won in the category Best Open Banking Partnership – Consumer.
Nick Wiles, chief executive officer of PayPoint, said: “We’re delighted to be taking majority ownership of obconnect and strengthening the partnership we have forged over the past two years.
“The obconnect team, led by Darran Morford, will continue to drive further growth opportunities in the Open Banking sector for the business and this investment further underpins our confidence in achieving our target of £100 million EBITDA by the end of full-year 2026.”
In September last year, Obconnect delivered a Confirmation of Payee solution for Citibank.
“PayPoint have been the perfect partners for us over the past two years and we’re pleased to be cementing that partnership to fuel further growth in the next few years,” added Darran Morford, Obconnect’s chief executive officer.
“Our mission to deliver industry-leading technology solutions in Open Banking and Confirmation of Payee across the world, and we’re delighted to be working more closely with PayPoint to unlock further opportunities in this fast-growing sector.”
Earlier this year, PayPoint invested £1 million in AperiData, a real-time credit reference agency and Open Banking platform.
Obconnect’s chief strategy officer Simon Lyons is speaking at Open Banking Expo UK & Europe 2024. Find out more about the speaker line-up and exhibitors and sponsors here.
