Customers Bank has agreed to sell its BankMobile Technologies unit to investment vehicle Megalith Financial Acquisition in a transaction that reflects an enterprise value of $140 million.
The plan is for the combined company to operate as BM Technologies and list on the Nyse.
The brainchild of Customers Bank CEO Jay Sidhu and his daughter Luvleen Sidhu, BankMobile launched in beta at the end of 2014, following a path first trod by Simple by offering traditional services through a mobile platform.
However, unlike Simple and other neo-banks, BankMobile had the advantage of Customers Bank's relationship with Higher One, a firm that distributes college students’ financial aid reimbursements via debit card accounts.
This relationship helped BankMobile build up a customer base which now stands at over two million accounts.
After the sale, all serviced deposits and loans will remain at Customers Bank while BM Technologies focuses on its role as a fintech, working with partners interested in its digital platform.
Earlier this week, the firm was one of a handful of lenders to partner Google for its mobile-first bank accounts within the Google Pay app. It also has a white-label strategy, with T-Mobile its most notable client.
"We are thrilled to partner with MFAC to become a public company. In an era when digital banking continues to expand, we look forward to building our business over the coming years and taking advantage of all strategic opportunities,” says BankMobile CEO Luvleen Sidhu.
A.J. Dunklau, CEO, MFAC, adds: "We believe that BankMobile’s approach to collaborate with distribution partners and partner banks, positions it well to continue to grow as an increasing number of non-banks are looking to offer financial services to their existing customers.
"Accordingly, we believe that the opportunity to bring BankMobile to the public markets as a stand-alone company is highly attractive.”