Dive Brief:
- Prepaid and gift card company Blackhawk Network will acquire Seattle-based digital gift card rewards startup Tango Card, the companies said Wednesday.
- Pleasanton, California-based Blackhawk Network was an early investor in Tango, and the two have been “longtime” partners, Blackhawk CEO and President Talbott Roche said in a news release, noting Tango’s services complement Blackhawk’s global product set.
- Terms of the deal were not disclosed. A spokesperson for Blackhawk Network didn’t immediately respond to questions regarding Tango’s headcount; whether all employees will remain following the acquisition; and the amount Blackhawk Network had previously invested in Tango Card.
Dive Insight:
Tango Card is a portfolio company of investment firm FTV Capital, which has invested $44.7 million in the startup. The company “is a pioneer in the rewards and incentives space,” offering digital-first gift cards through a cloud-based platform, said FTV Partner Chris Winship in an email.
That space has benefited from significant investment since Tango’s 2009 founding, fueled by demand in the business-to-business prepaid payments market for services issuing rewards and payments on a global scale, Winship said. Tango, which serves large clients that provide employee rewards, customer incentives and rebates, partners with companies that include Google, Uber, T-Mobile and J.D. Power, he noted.
FTV declined to disclose its share of ownership in Tango Card.
Through the acquisition, Blackhawk Network seeks to “provide leading, global, scalable solutions and innovation to the rewards and incentives industry,” Roche said.
Privately held Blackhawk Network, which has approximately 4,000 employees, operates in about 25 countries. It was acquired by private equity firm Silver Lake and hedge fund P2 Capital Partners in 2018 in a $3.5 billion deal. Prior to that, Blackhawk Network acquired CashStar in 2017 for $175 million.
Merger and acquisition activity in the payments industry is expected to rev up this year, as legacy players seek to bring unique, digital technologies in-house, and struggling startups find themselves in need of an exit plan. PE firms in particular are armed with capital.
Conditions for increased deal-making this year are likely to benefit well-capitalized payments buyers “as they tuck in assets that accelerate their strategic initiatives,” said a Bain & Company report on payments M&A published Tuesday.
