Q2 Holdings, an Austin, TX, fintech company, announced Tuesday it has acquired Des Moines, IA-based Social Money for $10.6 million.
Social Money makes cloud-based software that targets millennial consumers as well as populations called “underbanked,” who are frequently minorities or immigrants who do not interact with the mainstream financial sector. In particular, Social Money’s SmartyPig program is designed to provide users with goal-based savings tools online.
The deal is the second one this year for Q2 (NYSE: [[ticker:QTWO]]), which acquired Centrix Solutions of Lincoln, NE, in July for $20 million. The Nebraska company makes software to detect fraud and manage risk and compliance.
“We are committed to providing community financial institutions innovative technology specifically designed for the increasingly digital modern consumer,” Q2 CEO Matt Flake said in a statement.
I first spoke to Flake last year, following Q2’s $110 million IPO. The company, which was founded 11 years ago, sells software to community financial institutions, including credit unions, so that those customers can offer banking services online and via mobile devices.
Q2 says it provides electronic banking services to more than 360 banks and credit unions and reaches six million users in 27 states. For the third quarter, the company reported a net loss of $7 million, compared to a net loss of $4.6 million from the same quarter a year earlier.
Flake says the company now has more than $100 million in annual revenue with 30 percent year-over-year growth. “We’ll continue to grow our company,” he says. “If acquisitions occur along the way that add to our growth, that will be viewed as upside.”
