Ally is a real bank, Simple isn't, right?
My understanding is Simple just processes the transactions, without holding deposits. $1.7 billion sounds like a lot, but in Financial Services it's not that big. $117 million seems fair, if not high.
My understanding is Simple just processes the transactions, without holding deposits. $1.7 billion sounds like a lot, but in Financial Services it's not that big. $117 million seems fair, if not high.
This is an excellent purchase by BBVA, and a steal at that price. In short order they will move the assets over from the holding bank (that's the guaranteed money). At that acquisition price I suspect that Simple was struggling to return a profit since they were not actually a bank.
Simple's funding likely only increased their runway while they were building a product that I'm guessing was net-negative. I don't feel like they could generate enough revenue to cover their burn rate using their holding bank strategy. If they could I suspect they would have continued down this path as a fearsome (future) competitor.
Once some bank builds the underlying technology in-house correctly they're going to be nigh untouchable.