Amex buys UK payments start-up Cake for $13.3m
In a silent and covert action, American Express has bought UK payments firm Cake Technologies for $13.3 million, according to TechCrunch.
Cake’s website is down at the time of writing, but it offers an app to pay restaurant bills in London.
According to sources that spoke to TechCrunch, the deal quietly completed in October last year for a final price of $13.3 million. “However, due to an eleventh-hour preferential debt round and after fees, only some shareholders made a profit.”
TechCrunch says one source has revealed that Cake had raised a total of £4.5 million in equity and £1.4 million in debt. Part of the equity funding was a £1 million crowdfunding round on Crowdcube in 2015.
Confirming the acquisition, Amex gave TechCrunch the following statement:
“Last year American Express acquired Cake Technologies. This year, we will be on-boarding Cake and their technologies to collaborate on ways to provide our card members with enhanced service and value in the dining space, which is an area many of our card members are passionate about.”
Financial details were not disclosed, but Amex says Cake employees are now working for them.
The back story is worthy of a US TV drama as TechCrunch adds that in May 2017, Amex first made an offer to acquire Cake. “The start-up passed due diligence in late June, but Amex pulled the deal in mid-July for unknown reasons. Determined to get the sale back on track, Cake co-founder Kohlmann flew to New York unannounced and the deal eventually closed in October.”
As reported by FinTech Futures, Amex has been acquisitive and active as it seeks to conquer the payments market.
In February it got in on the messaging market with the acquisition of personal travel assistant Mezi for an undisclosed amount.
The Mezi app allows travellers to message their requests for flights, hotel or restaurant reservations, and it provides recommendations and makes travel arrangements at the customer’s request.
While back in November Amex launched blockchain-enabled, business-to-business cross-border payments with Santander using Ripple’s network.