Fobi to acquire PassWallet for $1.2 million CAD to enter FinTech space

Vancouver-based SaaS startup Fobi AI is set to acquire PassWallet for $1.2 million CAD (€888,000) to commence its strategy of entering the FinTech market.

The deal consist of $512,000 CAD (€355,200) paid in cash and $768,000 CAD (€532,800) in Fobi shares, which will be subjected to a restricted period of four months and one day from the date of issuance, as first reported by Proactive.

Headquartered in Munich, Germany, PassWallet is a subsidiary of Quicket GmbH, a tech startup that develops travel-based app solutions for mobile platforms. In its independent operations, PassWallet provides wallet passes for users with mobile devices running on Android’s operating system. Users are able to download passes from their email inbox, and scan different barcodes and QR codes to add into their digital wallet.

Founded in 2018, Fobi offers AI-powered, real-time data analytics that businesses can leverage to convert them into actionable insights. The company is currently publicly traded at the TSX Venture Exchange and OTC Markets Group.

RELATED: Fobi to acquire Qples for $3.2 million USD to expand retail opportunities

This upcoming acquisition will position Fobi as an up and coming leader in the digital wallet space, according to Rob Anson, the company’s CEO.

“With over 6 million downloads currently, management believes that by leveraging our artificial intelligence and data solutions, together with the global wallet pass growth rates, that this number will grow significantly in 2022,” he said, adding that there’s an untapped opportunity in the FinTech market with over 150 countries not serviced by Google Pay.

Currently, only 40 countries are listed in Google Pay’s supported regions for contactless purchases, excluding nations with high mobile usage rates such as Mexico and the Philippines. In 2019, 60 percent of the population in Mexico owns a smartphone, and this percentage is expected to increase up to 70 percent by 2025, according to Statista.

In a 2021 report by JP Morgan, digital wallets are the second most-used payment method in Canada, accounting for 18 percent of the payments market. The digital wallet market size is predicted to grow at a rate of 23 percent per year to take a 22 percent share of the payments market by 2021.

In its strategy to tap into multiple markets, Fobi also entered into an agreement in September to acquire Qples, a Fort Worth, Texas-based startup that provides a digital platform for coupons, for $3.2 million USD.

The company also raised $7.4 million in aggregate gross proceeds from undisclosed investors in July, where Fobi sold about 5.93 million units, each consisting of one common share and one-half of one common share purchase warrant.

Photo by CardMapr on Unsplash

Charlize Alcaraz

Charlize Alcaraz

Charlize Alcaraz is a journalism student at Ryerson University and the business and technology editor at The Eyeopener, Ryerson's largest independent newspaper.