Synchrony Financial Acquires GPShopper For Mobile Retail Technologies

| About: Synchrony Financial (SYF)
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Summary

Synchrony Financial has acquired mobile integration partner GPShopper for an undisclosed sum.

GPShopper has developed a suite of mobile engagement and commerce technologies for retailers.

The acquisition is low risk and promises to provide Synchrony with a boost to its mobile commerce offerings to retailers.

Quick Take

Consumer financial services firm Synchrony Financial (NYSE:SYF) has acquired mobile commerce app developer GPShopper for an undisclosed amount. GPShopper will provide a suite of mobile commerce technologies to Synchrony’s Retail Card division.

With low integration risk, the deal should be a clear win for Synchrony as it builds out its mobile offerings to retailers seeking to maximize engagement and revenues from mobile-centric consumers.

Target Company

New York City-based GPShopper was founded in 2007 by CEO Alex Muller and CMO Maya Mikhailov to create a mobile commerce platform that assists retailers in improving their customer engagement and revenues.

The company’s suite is comprised of several elements:

  • PCI Compliant Commerce
  • In-Store Mobile
  • Loyalty Programs
  • Analytics
  • Marketing
  • CMS

Notable customers included Crate & Barrel, Foot Locker (NYSE:FL) and Lane Bryant.

Below is a brief explainer video about the company:

(Source: GPShopper)

The company appears to have been bootstrapped until December 2012, when it raised funding from Allen & Company and Rudyard Partners and again raised funding ($3 million) in January 2015, likely from acquirer Synchrony.

GPShopper has created a very active partner program, which it divided into four groups:

  • Commerce
  • Customer Engagement
  • Agency
  • Retail Technology

Synchrony was a partner in the Retail Technology program.

Acquisition Terms, Rationale and Commentary

Neither party disclosed the amount paid or terms of the deal, although acquirer Synchrony Financial stated that the transaction "is not expected to have a material impact on financial results."

The two companies had been working together since 2015 as a result of a Synchrony investment, so were well known to each other prior to the transaction.

Synchrony previously operated at GE Capital Retail Finance Corporation and was spun out of GE (NYSE:GE) in 2014 via an IPO. The company is considered the largest provider of private label credit cards in the U.S., with 42% of the market according to a Nielsen Report cited on Bloomberg.

GPShopper and Synchrony collaborated on Synchrony’s SyPi plug-in, "a native credit feature that plugs in to a retailer’s mobile app…[and] allows retailers' credit cardholders to easily shop, redeem rewards, and securely manage and make payments to their accounts with their smartphones."

That bodes well for a successful integration of technology and team, so I consider integration risk to be low.

Synchrony said it will continue to serve GPShopper's existing client base as before but will merge the group into its Retail Card unit to offer additional mobile engagement and commerce capabilities to Synchrony's clients.

The advantage to Synchrony from the acquisition is that GPShopper is a mobile-first platform and suite of technologies that it can leverage to bolster its offerings in the "m-commerce" field.

By providing retailers with the technologies that free them up to focus on their retailing efforts, Synchrony hopes to position itself at the center of what it considers the future of retailing, which is a mobile-centric approach to fostering engagement and greater retailer value to consumers.

As GPShopper founder and CEO Alex Muller stated:

"Mobile commerce is driving the future of retail…our team will now have broader opportunities and greater resources to develop and deliver innovative mobile solutions for our retail partners."

For Synchrony, this acquisition looks like a low-risk way to improve and differentiate its mobile technology offerings to retailers.

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