The European financial technology market has just become a bit more competitive, all due to the appearance of Param, one of the largest Turkish fintech. Wanting to open up to a broader market, it acquired Twisto, a company focusing on Central and Eastern Europe from the Buy Now, Pay Later (BNPL) sector.
Param Enters Europe, Acquires Twisto
Twisto, one of the Czech Republic's pioneering fintech companies, was procured from its former owner, Zip Co. This strategic move not only fortifies Twisto's future but also grants it increased financial stability and growth potential, especially intending to turn profitable by 2023.
Furthermore, Param's current UK operations, which offer domestic and international transfers, will now witness a broader outreach. With this acquisition, it aims to extend its services to Twisto's primary markets, including the Czech Republic, Poland, Germany and the Netherlands.
Supported by globally recognized equity firms like the European Bank for Reconstruction and Development, RevoCapital, and others, Param delivers a myriad of financial solutions. These span from advanced payment solutions, open banking, and customer loyalty programs to its own BNPL service, Kredim. Through their combined expertise, Param and Twisto cater to over 85,000 merchants, associating with prominent brands from Turkey and others globally.
"Europe is a core focus for us as we continue our bold, yet healthy and sustainable, expansion strategy," Emin Can Yılmaz, the Founder and CEO of Param, commented. "Our proven business model and innovative solutions have already set a gold standard, and we are excited to introduce our technology and embedded finance solutions to eight European markets."
Mutual Benefits of the Acquisition
Param was Turkey's first e-money institution and remains unique in holding four distinct card schemes. Concurrently, Twisto is among the frontrunners introducing the Czech Republic to the BNPL model, now accounting for over 33 million transactions and a transaction value approaching €845 million.
Their collaboration aims to craft tailored offerings catering to varied industry needs. Param's primary focus lies in its B2B2X proposition, targeting expansion across Europe. This segment is expected to grow exponentially, reaching an estimated $440 billion in annual global revenue by 2030. Meanwhile, Twisto plans to diversify its product range further.
What's more, Param has consistently demonstrated profitability since 2014. With year-over-year growth of 90% last year, it has a transaction value of over €4.2 billion.
"In Param, we have found a partner that has proven time and time again the strength of its business model, and thirst for payments innovation," Michal Šmída, the CEO of Twisto, commented. "We believe that with this know-how, Param will make a significant contribution to the further sustainable growth of Twisto."
Fintech in Distress?
Param is becoming more prominent in the European market while the Old Continent is witnessing a significant slowdown in funding. In the first half of 2023, it shrank by more than half compared to the previous period.
In the second half of 2022, fintech funding amounted to $63.2 billion, which was spread across 2,885 deals. Yet, the first half of 2023 witnessed a decline, with funding dropping to $52.4 billion from 2,153 deals, as reported by the Pulse of Fintech, a publication by KPMG. This demonstrates a notable decrease in both total funding and the number of deals.
A report released in early July by Innovative Finance further validates these findings. Its data suggests a total capital investment of $27.3 billion across 1,714 deals, representing a decrease of 14% from the latter half of 2022. On a global scale, the financial technology sector witnessed a reduction in funding of 30%, totaling $95 billion for the year.
