A UK-based financial education app, GoHenry , is expanding into Europe for the first time. This happened after it acquired the French Startup Pixpay . However, the terms of the deal were not disclosed.
The Pixpay acquisition is, in many respects, the perfect means for GoHenry to broaden its reach. When GoHenry received a $40 million investment round 18 months ago, the emphasis was on ongoing expansion in the U.K. and U.S., which has always been its objective after its native market. However, GoHenry CEO Alex Zivoder told TechCrunch that Europe was always on the company's mind.
In his talks with TechCrunch, Zivoder stated that when the company was first launched in 2012 in the U.K., they had to learn from scratch and create a whole new category in fintech. He added that they had to pioneer in the field as they had no one to learn from before them. He also said that expanding in Europe was always part of the plan. However, their first step was to develop in the U.S. They achieved this goal in 2018, and since then, they have managed to experience triple-digit, year-on-year growth. After the funding round, held in December 2020, they were waiting for the proper chance to launch GoHenry in Europe.
There are many benefits to purchasing an established brand with traction like GoHenry did with Pixpay, perhaps chief among them being that GoHenry doesn't have to worry as much about hiring, localization, and launch campaigns. In addition, while GoHenry has essentially had to build itself up from scratch in the U.S., it's adopting an entirely different approach for markets closer to home. Finally, GoHenry stated that it had no plans to merge the two businesses; instead, their brands, leadership teams, and corporate offices would stay in place.
Regarding the acquisition of Pixpay, Zivoder said that given that Pixpay is an established leader in teen banking in Spain and France, its acquisition comes with many benefits for GoHenry. Pixpay is a trusted brand, so its acquisition makes sense, especially when GoHenry intends to expand in Europe. According to Zivoder, this will aid the company in gaining a competitive advantage in the region and create a better global leadership position. Moreover, he added that this does not mean the firm will not be resource pooling at some point. Considering Pixpay is solely focused on teenagers, GoHenry will be catering to children as young as six. This will enable both firms to combine their expertise in financial education, benefiting their clients in the long run.
About GoHenry
GoHenry, a London-based fintech company founded in 2012, targets young people aged six to 18 with a digital platform that enables parents to allocate and manage finances while their children learn how to budget and receive insight into their spending habits. According to the company, one-sixth of 12-year-olds already have a GoHenry debit card, which first entered the U.S. market in 2018. GoHenry claims it has more than two million members between these two markets today.
About Pixpay
Pixpay, established in Paris less than three years ago, offers a similar service to GoHenry but with a stronger emphasis on somewhat older kids, starting at 10. In November, the business entered Spain, bringing the total number of members in the two markets to about 200,000.
