Portland's online banking startup Simple has cashed out.
Spanish banker BBVA has paid $117 million for Simple, a company that has made a big splash by moving personal-finance services onto customers' phones. Rick Turoczy broke the story this morning on his blog Silicon Florist.
The deal is the biggest "exit" for a Portland startup in years. It was arranged by Portland company MergerTech, run by influential tech executive Nitin Khanna.
In 2011, WW introduced readers to Simple—then known as BankSimple—and its wunderkind programmer, Alex Payne:
Let’s clarify one thing: BankSimple isn’t a bank. Instead, it is a front end for banks: A Web application company that plans to partner with established commercial banks with no previous retail presence to provide checking and savings accounts and debit cards, as well as credit lines and personal loans.
Payne contends that this pared-down, exclusively online and mobile banking can beat Wall Street firms by targeting people who find most bank policies byzantine and daunting, and offering them great customer service.
“The [major] banks are more interested in earning revenue from fees and charges than they are from doing traditional banking and helping their customers out,” Payne says. “Those banks have, in some cases, actually invested in custom software that is designed to re-order transactions in such a way that more fees happen. If you don’t mind alienating your customers en masse, it’s a great way to make a pile of money.”
BankSimple will charge no overdraft or maintenance fees. (It plans to make money from interest on loans, plus the small earnings every bank gets when a debit card is used.) The company will eliminate the distinction between checking and savings accounts, automatically transferring funds to earn the most possible interest. It will provide customers with a “safe to spend” balance based on bill-payment patterns. Most daringly, it will automate budgeting for customers trying to save toward individual goals.
The story also profiled Khanna, who specializes in selling Portland's startups to bigger companies.