TabaPay, a SoftBank-backed payment platform, has announced its intention to acquire bankruptcy-filed BaaS (Banking-as-a-Service) provider Synapse’s assets. This move, pending court approval, looks to strengthen TabaPay’s foothold in the BaaS sector.
Synapse, established in 2014 by Bryan Keltner and Sankaet Pathak, offers a platform that aids banks and fintech firms in creating financial services. It simplifies the process of financial service development and empowers a culture of financial inclusivity. Unfortunately, their recent bankruptcy sent ripples through the industry.
Nonetheless, TabaPay intends to leverage Synapse’s technology to broaden its customer base, streamline service delivery, and push for expanded market influence. As such, there’s optimistic hope for a brighter future for Synapse’s technology under TabaPay’s wing.
Synapse’s had an impressive run, raising over $50 million in venture capital, thanks to significant contributors like Andreessen Horowitz, Core Innovation Capital, and Trinity Ventures.
TabaPay acquiring Synapse’s distressed assets
Their growth spurt was so notable that they featured on Deloitte’s 2023 Fast 500 list, showcasing a startling growth rate exceeding 650% in just five years.
But things took a downturn when growth stagnated, leading to a substantial reduction in the workforce and disputes with Evolve Bank & Trust and business-banking startup Mercury. The disagreements and missteps caused an unfavorable domino effect, contributing to the bankruptcy filing.
However, TabaPay stands to benefit immensely from acquiring Synapse’s assets. This extend its range of services, secures the continued services for Synapse’s clients, and strengthens its market position. On the flip side, Synapse’s customer base gets the assurance of constant and possibly improved services.
The BaaS industry, despite its occasional challenges like regulatory scrutiny and staff reductions, continues to show signs of resilience and determination. In fact, it’s forecasted by Grand View Research that the global BaaS market is set to hit a staggering USD 16.50 billion by 2025, fueled by the evolving digital transactions landscape and advancements in banking technologies.
So, regardless of whatever hurdles come up, the BaaS industry seems steadily set on its growth path. Deals like TabaPay’s acquisition of Synapse’s assets signify the industry’s readiness to adapt and thrive, making it a global fintech solution hub.
