Dive Brief:

• Payment processor Shift4 has agreed to acquire Tel Aviv-based Finaro, a cross-border payments company servicing some 5,000 merchants, and The Giving Block, a firm that facilitates cryptocurrency fundraising for nonprofits, the companies said in a Tuesday press release.
• Shift4 will purchase Finaro for $525 million, in a mix of equity and cash, with the potential for a higher price tag if goals are met, according to a Shift4 document posted on the company's website. Shift4 will buy The Giving Block for $54 million, also with the potential for a higher price tag, per another document posted on Shift4's site. The Finaro acquisition is expected to close at the end of this year, subject to regulatory approvals. The Giving Block acquisition closed at the signing of the agreement.
• Finaro has about 300 employees between two offices in Israel and Malta; The Giving Block has about 50 employees, many of them based in Florida, according to a spokesperson for Shift4, which has a headcount on its own of about 1,700. Shift4 doesn't intend to downsize at either company, the spokesperson said by email. 

Dive Insight:

The acquisitions, which allow Shift4 to broaden its reach globally and in the crypto sphere, "will serve to both accelerate our growth and continue to transform the company," Shift4 CEO Jared Isaacman wrote in a letter to investors announcing the purchases. 

Shift4 will make use of Finaro’s global infrastructure and technology to grow internationally, expanding Shift4’s SkyTab point-of-sale offering, its Shift4Shop e-commerce platform and VenueNext stadium tool, the release said. 

Finaro, which rebranded from Credorax in December 2021, enhances Shift4’s presence in Europe and Asia, furthering payment opportunities in e-commerce, restaurant, hospitality and entertainment venue services, among other areas.

Almost all of Finaro's payments volume is via e-commmerce and 80% of transactions are cross-border, with two dozen different nations represented within its merchant ecosystem, according to the company's website. 

As the buzz around crypto has grown and more consumers express interest in investing, paying with and donating using crypto, "we intend to be at the forefront of this movement and leverage The Giving Block technology across the entire Shift4 enterprise," Isaacman said.

In pursuing cross-sell opportunities, Shift4 — which has about 200,000 merchant customers — will seek to integrate crypto donation capabilities with card acceptance, tapping a $45 billion embedded conversion opportunity with existing nonprofit clients, the release said. Shift4 also plans to create a crypto innovation center, to further crypto acceptance and settlement abilities across the company’s offerings. 

Shift4 also expects The Giving Block, which works with about 1,300 nonprofits, to give it an edge in the $450 billion global nonprofit market, per the letter to investors. 

After surpassing $100 million in crypto donations last year, The Giving Block cofounder Alex Wilson said during a December 2021 interview he expected the company would raise more than $1 billion in crypto donations by the end of 2022, and work with more than 5,000 nonprofits.

Together, the acquisitions are expected to add about $15 billion in payment volume next year, generating about $35 million in adjusted earnings, the release said.

As for future acquisitions, "Shift4 continues to strategically evaluate opportunities that align with our goals, but does not have any specific plans or numbers in mind," a spokesperson said in an email.

In March 2021, Shift4 paid $72 million for VenueNext, which provides payment software for stadiums and other venues. Shift4 sold shares to the public in June 2020 after raising capital from investors including Searchlight Capital Partners.