There is some big news out of Australia today. Credible Labs, based in San Francisco but listed on the Australian Stock Exchange, has reached an agreement with Fox Corporation (yes, that Fox) to sell 67% of the company for $265 million. This values the company at $397 million which is a 31% premium over the stock’s closing price on May 28, the day before receiving the offer from Fox. Fox Corp. will also provide $75 million in growth capital over the next two years.
Founder and CEO Stephen Dash (you can listen to my 2016 interview with him here) is an Australian who moved to San Francisco in 2012 to start Credible. He will remain head of the newly formed Fox subsidiary and will exchange shares equal to 33% of Credible’s outstanding common stock into units of this subsidiary.
I sent Dash a message last night but he did not respond by the time of publication. However, he did say this in the press release:
Fox Corporation’s record of innovation and focus on audience engagement will further enhance Credible’s position as a leading consumer finance marketplace in the United States, creating opportunities for organic growth and the expansion of the Credible platform. Credible’s industry-leading user experience, combined with FOX, will provide greater impact and scale for consumers.
New York-based Fox Corporation is actually a newly created media company controlled by the Murdoch family. It was formed out of the Disney acquisition of 21st Century Fox and it began trading on Nasdaq earlier this year. It includes Fox’s television properties such as Fox News, Fox Business Network and Fox Sports.
Here is what Fox CEO Lachlan Murdoch said about the acquisition:
The acquisition of Credible underscores Fox Corporation’s innovative digital strategy that emphasizes direct interactions with our consumers to provide services they want and expand their engagement with us across platforms. Credible, which has tremendous synergy with core brands such as FOX Business and FOX Television Stations and will benefit from our audience reach and scale, will drive strategic growth, further develop our brand verticals and deepen consumer relationships.
One can only speculate as to the exact motives behind this deal for Fox and whether this is the beginning of new interest in fintech for the company. It was noted in many articles I read this morning that Credible is an advertiser on several Fox properties.
Many people may not realize that the Chairman of Credible is none other than the godfather of fintech himself, Ron Suber. I did talk to him this morning and he sent me this short statement:
Credible is a great example of an entrepreneur (and team) with laser focus on the company’s mission, vision and values. Execution, creativity and product expansion were key to the remarkable growth and value creation.
He went on to say that this could be the beginning of big public companies acquiring fintech companies as we enter a new era in the global fintech industry. Suber was an early investor in Credible and became chairman in 2017 after he left his position as President of Prosper and began his “rewirement”.
Here is the full press release from the Australian Stock Exchange which also includes the complete merger agreement.
My Take
When I heard the news last night I have to say I was surprised. It certainly doesn’t seem like a logical fit by any means. While I have always been a big fan of what Stephen Dash and his team have done at Credible I am a little baffled as to what the Murdoch family is trying to achieve here.
Credible is an online marketplace for student loans, personal loans and mortgages and they have excellent engagement with their customers. Lachlan Murdoch talks about, from Fox’s perspective, of their need for “direct interactions with consumers” and “expanding their engagement across platforms”. Certainly, Credible can help them achieve this but so could many other companies both fintech and non-fintech. It is easier to understand from Credible’s perspective because they get access to a huge audience from a leading media company.
One thing I will say is that Credible is one of the very few fintech companies to go public in recent years that has performed well on the public markets. Their valuation as part of this acquisition is almost double what they were valued at when they went public in late 2017. So, from a fintech perspective this is a real success story.
Anyway, it will be an interesting one to watch unfold and to see if Fox makes any more fintech acquisitions.
