Anatomy of an Acquisition: Power and Marqeta

Earlier this year, Marqeta announced that it would acquire our Anthemis Venture Fund II portfolio company Power for $275 million. The acquisition was a first for Marqeta in its 13-year history. Power, meanwhile, was just barely two years old — Anthemis co-led its seed round in 2021. The transaction remains among the largest of 2023 and we think there’s a lot to learn from it.

So we were very excited to host a virtual conversation last week about the journey to and through that acquisition. The key players from both sides of the table shared their perspectives; we were joined by Randy Fernando, Power’s founder and now Marqeta’s VP of Product, and Blake Clifton, Marqeta’s Head of Corporate Development.

Blake, Randy, and Anthemis Partner Tom Ryan discussed their own professional journeys, the key factors both parties considered in exploring an acquisition, best practices along the way, and the promises and challenges of scaling a fintech business through M&A. You can watch the full conversation below. Here are a few excerpts that we valued:

• When an institution calls, answer — whether you see a sale on the horizon or not. Blake Clifton told us, “if there’s a founder we call in our space and they don’t take the call, we don’t want them. Because that’s not an intelligent founder. You’re going to learn things even if you don’t reveal anything and you’re not for sale. This acquisition happened because that [informal] dialogue stayed open…for more than six months.”
• Power wasn’t instantly open to the concept of acquisition. Here’s Randy Fernando: “we asked ourselves if [acquisition] was a path that we wanted to go down, and the obvious answer was no. But at some point, [we thought that] we’re probably going to become competitors if we don’t go down this path…so we started to think about whether it made sense to partner to try to accelerate our vision…for us, strategically, and as we started to get to know the team more, it began to make a lot of sense.”
• Err on the side of an uncomfortable level of mutual transparency. As Randy said, “we were very open with what we believed was best for the future of credit and Marqeta. We were very open about our style and culture and team. Sometimes as you’re going through a negotiation, you refrain from sharing those details. But we felt like it was important because we knew that our work wasn’t going to end the day of closing. It was actually just beginning and we were going to be writing many more chapters here.”
• Does Marqeta have a certain number of acquisitions that it can make each year? Absolutely not. Blake told us that “we look at as many [startups] as possible. We are constantly combing through. When I called him, Power was in stealth and Randy’s first question was, ‘how did you even find us?’ There’s not really a [target acquisition] number…I can never hit the number I want to. Because this is how we formulate our view of the world and what great is.”

The Marqeta-Power acquisition validates our belief that strategic M&A will continue to be a critical driver of innovation in an industry that often grows through collaboration rather than disruption. We think that acquisition appetite among financial institutions will be even more pivotal here against the backdrop of an uncertain environment in public markets and the macroeconomy.

We were so proud of Randy, his co-founder Andrew, and the Power team for achieving this incredible milestone. It was a privilege to partner with them to reimagine the infrastructure of branded cards and create a platform that an industry leader like Marqeta viewed as essential to its growth.

Randy and Andrew will remain an important part of the Anthemis ecosystem, joining a sprawling network of financial institutions, industry visionaries, and more than 200 portfolio companies. We’re thrilled to count Blake and Marqeta a part of that ecosystem now as well!

We really enjoyed this dialogue and hope you will too. Watch the replay here.