The acquisition comes as Jacksonville, Florida-based FIS prepares to unwind its acquisition of Worldpay, spinning off that unit that provides processing services to merchants by early next year. The remaining FIS business will continue to offer financial technology and payments services to banking and capital markets clients.

FIS has been under new leadership since late last year when Stephanie Ferris took over as CEO from Gary Norcross in December. The company has been spearheading changes after the arrival of activist investors D.E. Shaw and JANA Partners among the ranks of its shareholders last year. It began a comprehensive review of its operations after discussions with those investment firms. 

The purchase of Bond could increase FIS’s banking ties. Bond has partnerships with banks that include Evolve Bank & Trust. By tapping bank partner licenses, Bond lets fintech clients build software services for consumers. It’s also linked with other payments players, including identity verification firm Alloy and financial tech tools company Plaid. 

Bond was co-founded by Roy Andrew Ng, who is the company’s CEO, and by Yan Wu, who is its chief operating officer. A year after they founded the company, in 2020, Bond raised $32 million from high-profile investors, including the investment bank Goldman Sachs, card network company Mastercard and the venture capital firm Coatue Management.

Ng will remain with the Bond operation under FIS ownership and report to Tarun Bhatnagar, president of platform and enterprise solutions, according to the leaked memo. A spokesperson for FIS declined to comment on the reports. Terms of the transaction, including price paid, weren’t reported.

The acquisition will fill a gap in FIS’s ability to provide embedded finance services and will expand its ability to sell to fintechs, according to the memo.

FIS expects to increase revenue in its banking unit this year, even if the unit’s backlog is flat or down, according to a Friday analyst note from the research arm of the financial firm Robert W. Baird, based on an FIS presentation to investors last week.

With venture capital in more limited supply over the past year, demand for Bond’s service from fintechs, which were previously soaking up that capital, may have waned.

Other deals over the past year that had a similar banking-as-a-service infrastructure theme included Fifth Third Bank’s acquisition of the industry platform Rize last month, according to the Fintech Business Weekly report.

By Lynne Marek on June 12, 2023
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