Update: Viva Wallet announced the deal has finalized. JP Morgan acquired 48.5% of the company, without any changes to the terms agreed in January. The transaction exceeded 800 million euros.
After a previous red-hot year, the Greek tech startup ecosystem started 2022 enforce, with major news: neobank Viva Wallet’s partial acquisition by US bank JP Morgan Chase.
Thus, concerns started to surface in the market when November 30th, the deadline for the deal’s conclusion, came and passed without a formal agreement.
The Recursive previously reported that JP Morgan intended to purchase a 49% stake in Viva Wallet to tap into regional market opportunities for its payments division. In turn, the deal would allegedly catapult the fintech’s to unicorn status, as they were seeking a valuation of around $1.5 billion at the time.
But where is the deal today, and what are the tensions surrounding it?
A lot happened between the announcement and the present day: a war started by the Russian invasion of Ukraine; rising inflation; increasing distress for financial markets, and the first signs of a global recession, following market disruptions during the COVID pandemic and accelerated by the war.
Tech companies haven’t been spared of the effects. With the downturn, investors’ risk appetite is lowering, meaning fewer and smaller tickets, lower valuations, more extended runaways, and extended periods of analyzing a deal.
In the case of the Viva-Wallet-JP Morgan deal, it received an extension of 10 days, according to The Recursive’s sources.
Despite official silence, local media dives deeper into some reasons for this extension, talking about a potential “wrecking of the deal.” Rumour has it that the leading cause of the delay in the deal’s completion is the two parties’ disagreement over the final purchase price. This wouldn’t be the biggest surprise given current market conditions and its effects on the deal value of fintech transactions, which have dropped to $20.4 billion in Q2 2022 from $30.3 billion in the previous quarter.
While it was never officially announced nor confirmed, JP Morgan reportedly valued Viva Wallet at $2.05 billion and agreed to purchase 48.5% of the shares for 1.02 billion euros. Out of this. 159.5 million euros would go into Viva Wallet, about 70.9 million euros would repay a bond, and the remaining amount would pay the minority shareholders who owned 48.5% of the shares.
In addition, from the majority of shares (51.5%) remaining with co-founders Haris Karonis and Makis Antypas and other shareholders, 3.5% would be offered through stock options to 200 top executives at Viva Wallet, to be activated after three years. However, the two parties allegedly disagreed over the price of Viva Wallet’s majority shareholders’ stock when they would sell in three years, with JP Morgan reluctant to pay the premium price asked.
Adding to the mystery surrounding the deal, a member of the board of directors of Viva Wallet, Nikos Voutihtis, resigned on November 15th while continuing as a member of the Board of Directors of Viva’s subsidiary, Viva Electronic Services SA. Mr. Vouthitis was the last representative of the LATSCO Family Office minority shareholders in Viva Wallet after Dimitris Afentoulis, CEO of Latsco, and Ioannis Kalatzis, DECA’s Investment Director, had previously left.
Viva Group’s revenues grew to 82 million euros in 2021 from 44.2 million euros in 2020. Present in 24 markets, the payment institution has the largest footprint in Europe. Most recently, they expanded the line-up of payment options by adding “Pay with Klarna”, a service counting 150 million global active users and 2 million transactions per day.
