Old Mutual buys 22seven [updated]
Not long after launching, and following a public bust-up with Absa, personal financial management website 22seven has been sold to Old Mutual. By Duncan McLeod and Craig Wilson.
Financial services giant Old Mutual has acquired personal financial management start-up 22seven as part of a strategy of what it calls “developing digital support for its customers”.
The value of the deal has not been disclosed.
22seven, which provides consumers with a graphical representation of their income and spend in an effort to help them manage their personal finances better, exited its beta phase last May and began offering users a 30-day trial followed by a R70/month subscription.
CEO Christo Davel says 22seven began speaking to a variety of potential partners in mid-2012, including Old Mutual, which liked the synergies between the companies. Davel says he and the team will stay on following the sale of the business. “The entire team is excited about this. We hope to be able to internationalise the business down the line.”
The value of the deal is not being disclosed, and 22seven is also not disclosing how many subscribers it’s signed up. Old Mutual strategic marketing director Carlton Hood says 22seven has a “fantastic number of customers for a start-up that’s done no marketing, but nowhere nearly yet enough for us”.
Hood says the acquisition is in line with Old Mutual’s plans to “ramp up” its “digital competence” and to offer 22seven as a “value service” to its customers. He says Old Mutual hasn’t decided whether to make the product available for free to its clients.
For a young start-up, 22seven managed to get some big companies hot under the collar. Absa decried the service and suggested that customers using it could find themselves unable to claim compensation in instances of fraud, even if the fraud was unrelated to 22seven. The bank pointed to its terms of service that preclude customers from giving their online banking information to any third party.
Absa rival First National Bank offered a solution whereby its customers could create a secondary, “read-only” profile for use with the service. Davel claims that, as a result of Absa’s response, a number of the bank’s clients moved to FNB and that this was an endorsement of how eager the public was at the time for these types of services.
Shortly after 22seven’s launch, Standard Bank and Nedbank both expressed their concerns about the security of the service, with the latter subsequently launching its own product at the end of August last year.
In a prepared statement, Davel says 22seven is “fired up” about where it can go following the acquisition.
“We’ve always had big plans for our service, and what we think it’s capable of doing. With Old Mutual’s support, the evolution and enhancement will happen much faster.”
The 22seven team will remain in their office in Cape Town’s central business district. — (c) 2013 NewsCentral Media