The United Arab Emirates (UAE) tech startup ecosystem has again recorded another successful tech exit with the acquisition of the embedded finance platform "Embedded" by Germany-based marketing technology provider Mitgo Group. For an undisclosed amount, the acquisition aims to bolster Mitgo's offerings in the affiliate marketing sector by integrating embedded finance solutions.
Mitgo Group's decision to acquire Embedded aligns with its strategic move to establish a new business division focused on fintech services for affiliate publishers. With affiliate marketing spending reaching $14.4 billion in 2023 and projected growth surpassing $15.7 billion this year, Mitgo aims to capture a significant share of this market, targeting over 7% of transaction volume, potentially exceeding $1.5 billion in value.
The newly formed division will provide a suite of embedded finance solutions, enabling millions of publishers worldwide with a particular focus on underbanked audiences in the MENA, APAC, and LATAM regions. These solutions will allow publishers to access their earnings instantly, obtain loans, reduce transaction costs, streamline exchange commissions, enhance transaction speed, and enjoy other benefits, thus addressing the specific financial needs of small and medium-sized businesses (SMBs) operating in the affiliate marketing space.
Mitgo Group's extensive experience in affiliate marketing, coupled with advanced algorithms utilizing AI and machine learning, positions the company to accurately assess borrowers and build a low-risk yet profitable loan portfolio. This expertise will empower financial industry leaders, including major banks, payment systems, and e-wallet providers, to expand their customer base and niche product offerings in previously untapped markets and sectors.
“On top of other viable opportunities, our future partners from the financial industry will get both an excellent test site on the basis of a new market and a vast system of distribution of financial products among the audience of publishers: cashback services, media buyers, loyalty programs, BNPL services, and many others. With our help, they will be able to offer a suitable set of solutions to hundreds of millions of their users around the world,” said Alexander Bachmann, founder and CEO of Mitgo Group.
Under the leadership of Oleg Chanchikov, CEO and founder of Embedded, the new business direction aims to revolutionize the use of financial products within the MarTech industry. Chanchikov, with over 20 years of experience in both IT and financial markets, envisions embedded finance solutions as a catalyst for empowering SMBs and making financial services more accessible.
“The entire world, including global players in the financial market and international organizations such as the UN and World Bank, work to empower SMBs and make financial services more accessible for them. Embedded finance solutions help the market grow not just from the top-down approach when a bank offers pre-defined products to its clients but also from the bottom-up when the industries themselves use financial products to solve the needs and problems in their core business. I believe, together with Mitgo Group, we will not just change the way the MarTech industry uses financial products but introduce revolutionary solutions that will change the whole market," Oleg explained.
With Mitgo Group's backing, Embedded aims to introduce innovative solutions that not only transform the MarTech industry's use of financial products but also have a broader impact on the market as a whole. The collaboration between the two entities signifies a strategic alliance poised to shape the future of affiliate marketing and embedded finance solutions globally.
