MoneyLion’s recent acquisition of Even Financial (now Engine by MoneyLion) will drive growth for both companies, Engine’s founder Phillip Rosen said.
The transaction occurred in February. Rosen said the two companies had known each other well for seven years. They once had offices across the street from each other. MoneyLion was an Even client.
Rosen explained that they’d talked about a union since those early days, and the time was right. It was time for Even to raise capital or look for a union. While there were some other interesting options, Rosen opted for the known entity. (Rosen remains with the company.)
A souped-up Engine
The pluses begin with gaining access to first-party financial services products. MoneyLion’s product suite complements Engine’s, Rosen said.
“If you look at what MoneyLion does, they’re a neobank that’s focused on subprime, serving the credit needs of consumers who are otherwise unbanked are unserved. It’s a pretty unique position in the market,” Rosen noted. “They were not just complementary to our existing product sets but in a way that wasn’t competitive with our client base.
“We could continue to serve and create great services for everybody in a near-prime and prime credit space. MoneyLion would fill the gap, which was previously underrepresented in our marketplace.”
Rosen said to judge early success by drastically lower customer acquisition costs (CAC). High CAC is one of the biggest impediments to growth. Given MoneyLion’s unique marketplace positioning, Rosen said clients would benefit.
“Our data and analytics give our clients unique insights into their growth and acquisition strategies. Our data products let them understand and serve customers in ways they otherwise couldn’t. So we’re the Engine that drives a lot of the growth in the industry.”
Rosen added that a longer-term goal for Engine is to commercialize some MoneyLion API and data products to serve clients. He likens it to how Galileo functions with SoFi’s ecosystem.
An easy transition
Immediately following the acquisition, Engine stressed to clients that they could still serve them as before but with expanded capability. MoneyLion’s data allows them to do a better job. (Rosen said the name change was due to a long-term trademark dispute and was happening regardless.)
Technical integrations were easier than with other unions, Rosen said. Engine was designed as an API platform, so it naturally integrates with others.
“Our underwriting and onboarding systems have integrated with 100 companies and power over 500 channel partners via those APIs and integrations,” Rosen said. “MoneyLion is very strong technically, I’d say uniquely so. With 300-plus engineers globally, they have built a lot of the tech in-house that other companies have relied on others for.
“And since we’ve been working together for years, it’s let us move faster. We’ve started to move some of the gates between our teams collaborating. We’ve maintained some data silos, but this has allowed us to be much better about our API integrations and aligning the objectives.”
The proof is in the pudding, Rosen said. CAC is between 20-25% of other neobanks’ costs.
“That’s allowed us to achieve our financial tech targets aggressively,” Rosen explained. “Our beta was fairly close to breakeven in Q4, and that trajectory continues over the year.
“We’re basically in growth mode. Even though there’s a credit crunch hitting the industry, we’re incredibly well-positioned because now our consumers need us more than ever. We have a unique value proposition for them that we can deliver seamlessly and efficiently.”
