Successful fintech entrepreneur Michael H. Giles backs Change Financial for global growth
Brisbane-based global fintech and payments as a service (PaaS) provider, Change Financial Limited (ASX: CCA, Change, the Company), has secured A$6.9 million in new funding from prominent US-based fintech entrepreneur and investor Michael H. Giles (pictured) to continue its push towards revolutionising the digital and card payment market in the US.
Change CEO and Managing Director Alastair Wilkie said the strategic investment by Giles through his financial technology development company, FinTech HQ, will allow Change to more aggressively pursue growth opportunities aligned with its strategy – particularly in the US where FinTech HQ has strong relationships.
“The US is a key market in the global financial system, but legacy infrastructure, market fragmentation and a lack of competition have so far restricted the take up of modern payment systems compared with other countries.
“Times are changing, and younger generations of consumers and businesses are looking for more efficient, seamless and secure payment solutions. This shift is creating a significant opportunity for Change, as we can provide US mid-sized banks and fintechs with a faster path to market for prepaid, credit and debit card products to better meet evolving customer expectations,” Wilkie said.
Change uses innovative and scalable technology to provide tailored payment solutions, card issuing and testing to banks and fintechs. The Company manages and processes more than 27 million virtual, credit, debit and prepaid cards globally, with Australia, New Zealand, the US and Latin America being key growth markets.
Fintech entrepreneur’s meaningful contribution to Change
Wilkie said FinTech HQ’s investment will consolidate Change’s position as it embarks on its next phase of growth and that the Company is delighted to be working with Giles.
“To have a long-term investor with such a successful fintech pedigree growing his stake in our business shows a strong belief in our products and strategy,” Wilkie said.
Giles rose to prominence as Founder and CEO of Third Party Technologies Inc., which was acquired in 2019 by Block, Inc. (NYSE: SQ, formerly Square, Inc.), the mobile payments company founded by former Twitter CEO and co-founder Jack Dorsey. Since exiting Third Party Technologies, Giles founded Embed Financial Technologies Inc. in 2020, and subsequently sold the business to FTX US in 2022.
Giles has continued as a successful investor in more than 40 innovative fintech companies that have collectively raised hundreds of millions of dollars from institutional investors. He has invested early-stage funding and assisted many fast-growing fintech companies since 2019 including, Moov Financial, which in January raised $US45 million in Series B funding from major investors including Commerce Ventures, Andreessen Horowitz, Bain Capital Ventures (BCV) and Visa; and Power Finance, which was recently acquired by US-listed Marqeta (NASDAQ: MQ) for $US275 million.
Giles said, “I have been a small investor in Change since 2020 and I believe that now is the right time for the business and myself personally to make a meaningful investment and time contribution to the Company.
“Change has developed its proprietary technology in-house and is now at an exciting inflection point with the development of its software and customer traction. As a founder of several API-based fintech companies, I know all too well the time and effort it takes to develop and commercialise new financial technologies, typically several years and many millions of dollars.
“I will be contributing my efforts to accelerate the adoption of Change’s payments as a service platform, especially in the US market,” Giles said.
Giles’ investment in Change gives him a 19.99% stake in the Company, acquired via a combination of on-market purchases and a placement at a premium to the current market price. Giles has agreed to a 12-month voluntary escrow period for the shares acquired through the placement. Henslow acted as an adviser to Change on the placement.
The investment will allow Change to leverage FinTech HQ’s relationships with several US banks and associated fintechs to enhance the US rollout of an updated version of the Vertexon PaaS platform, which will be released shortly.
The Vertexon platform is a cloud-hosted platform that seamlessly integrates with a businesses’ core systems, enabling them to easily deliver physical and digital card solutions to their customers.
A strong starting position
Change has already gained a solid foothold in the US market, having last year secured a five-year partnership agreement with Mastercard to issue debit cards as well as prepaid cards to US clients.
The Mastercard agreement in the US follows Change’s recent extension of its partnership with Mastercard to issue prepaid and debit cards for Australian and New Zealand clients.
Change is also expanding its services in Australia and New Zealand, having been granted an Australian Financial Services Licence (AFSL) in January which allows the Company to issue prepaid cards in Australia, complementing its existing prepaid and debit card issuing capability in New Zealand.
Wilkie said, “We’re keen to accelerate the growth of our business in our core target markets of Australia, New Zealand, the US and Latin America. With the investment by FinTech HQ, access to Michael’s expertise and networks in the US, our partnership with Mastercard, and the imminent launch of the latest version of our Vertexon platform, we are extremely well-positioned to achieve this.”
