Fox To Acquire Majority Credible Labs Stake For Fintech Marketplace

Aug. 15, 2019 12:48 PM ETFox Corporation (FOXA)7 Comments

Summary

  • Fox Corporation has agreed to acquire a majority of Credible Labs for $265 million plus an additional investment commitment over two years.
  • Credible has developed an online marketplace matching lenders and consumer borrowers.
  • With the transaction, Fox sees synergies between Credible and its Fox Business and Television Stations units as it charts a new course.
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Quick Take

Fox (NASDAQ:FOXA) announced it has agreed to acquire a controlling interest in Credible Labs for $265 million.

Credible Labs operates an online multi-lender financial services marketplace.

With the deal, FOXA hopes to combine Credible with its Fox Business and Television Station assets and leverage those audiences for Credible’s fintech marketplace.

Target Company

San Francisco, California-based Credible was founded in 2012 to develop an online multi-lender marketplace that allows borrowers to receive competitive loan offers from lenders.

Management is headed by Founder and CEO Stephen Dash, who was previously Investment Director at M.H. Carnegie & Co.

Below is an overview video of how Credible works:

Source: Credible

Investors have invested at least $25.3 million in the company and include Ron Suber, Carthona Capital, Regal Funds Management, AMTD Group, Scott Langmack, Soul Htite, Cthulhu Ventures, and Redbus Group among others. Source: Crunchbase

Market & Competition

According to a market research report by TransUnion, in 2018, the unsecured personal loan market reached an all-time-high of $138 billion, marking a year-over-year [yoy] growth of 17%.

During the same year, fintech companies made up about 38% of the personal loans market.

In contrast, traditional banks’ and credit unions’ shares accounted for 28% and 21% of the market in 2018, representing a drop from 40% and 31% in 2013, respectively, as illustrated by the chart below:

Source: TransUnion

Major fintech firms that provide personal loans include:

  • Lendio

  • LendKey

  • Upstart Network

  • Nav

Source: Sentieo

Acquisition Terms and Financial

Fox disclosed the acquisition price and terms as an acquisition of 67% of the Credible Labs equity for $265 million in cash to Credible’s shareholders.

Additionally, Fox committed to invest ‘up to $USD 75 million of growth capital to Credible over approximately two years.’

A review of the firm’s most recent 10-K filing indicates that as

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