Live Oak Ventures, a subsidiary of Live Oak Bancshares, will reap the fruits of its investments in financial technology firm Finxact Inc. if a planned acquisition of the company is approved.
 
Monday, finance firm Fiserv Inc. announced it has signed a definitive agreement to acquire Finxact for about $650 million. Live Oak Ventures, like Wisconsin-based Fiserv, was an early investor in the fintech company, which was founded in 2016. Fiserv is purchasing the shares of all other Finxact investors.
 
The acquisition is subject to customary regulatory approvals and closing conditions. If all goes smoothly, the transaction should close later this year, Fiserv officials stated in the release.
 
Florida-based Finxact has raised at least $42 million since its founding, according to reports. Its initial capital raise, which included Live Oak Bancshares as an investor, totaled about $12 million. Another $30 million resulted from a second capital round in 2019. Live Oak Bancshares was also among those investors.
 
Live Oak Bancshares “anticipates realizing an estimated pre-tax gain of approximately $115 million” if the transaction closes successfully, the company stated in an SEC filing Monday.
 
"We remain enthusiastic about the power and promise of Finxact’s platform and look forward to what the future holds," Live Oak spokeswoman Claire Parker said Wednesday.
 
Live Oak Bancshares did more than invest in the fintech: It adopted the technology. A couple of years ago, its subsidiary Live Oak Bank converted all of its retail and commercial deposit accounts to Finxact’s cloud-based open core platform, according to a Finxact news release dated Sept. 7.
 
System conversion on the lending side had been completed earlier, according to the release.
 
“The Finxact core was ready in the spring of 2020 for Live Oak to originate almost $2 billion in PPP loans during the height of the pandemic,” the release stated.
 
Apiture, Live Oak Bancshares’ joint venture with First Data Corp. (owned by Fiserv), also uses the Finxact core for its Digital Banking Platform, enabling customers of Apiture’s financial institution clients to see transactions and other information in real time.

NOTE: This version of the story includes a statement by a Live Oak spokeswoman.