J.P. Morgan ChaseJPM +0.59%& Co. said that it agreed to buy payments company WePay Inc. in the bank’s first sizable acquisition of a financial-technology startup. The banking giant plans to roll out WePay’s technology to J.P. Morgan’s four million small-business customers, said Matt Kane, CEO of Chase Merchant Services. WePay, which has roughly 200 employees, helps online marketplaces and crowdfunding websites like GoFundMe process payments.
The two companies didn’t disclose terms of the deal. But a person familiar with the matter said the price was above the roughly $220 million valuation that Redwood City, Calif.-based WePay achieved in a 2015 fundraising. FTV Capital led that round, with participation from Japanese e-commerce company Rakuten and earlier investors including Highland Capital Partners, August Capital, Continental Investors and Ignition Partners.
The growing popularity of e-commerce and mobile shopping has fueled deal making in the payments sector of late. There have been 166 deals involving payments companies in 2017 for a total of at least $29.3 billion, the most in any segment of fintech, according to investment bank Financial Technology Partners LP.
Even though J.P. Morgan, led by CEO James Dimon, hasn’t made many large acquisitions of fintech companies, it has been an active investor in startups there. Over the past 12 months, it participated in a $100 million fundraising for business-to-business payments firm Bill.com Inc. and a $50 million fundraising for LevelUp, which enables customers to pay at restaurants and coffee shops using their smartphones.