Dive Brief:
- JPMorgan Chase has acquired the college financial planning platform Frank, the bank announced in a press release Tuesday. The outlet allows students to access a streamlined application process for student aid, as well as financial advice and a marketplace to find discounted online classes for college credit.
- The bank has been somewhat of a serial acquirer this year, making more than 30 deals, Reuters reported Wednesday, citing data from Refinitiv and Dealogic. But many of those transactions have been outside banking — or banking-adjacent. Regulations prohibit the bank from acquiring additional U.S.-based deposit-taking institutions because JPMorgan Chase already holds more than 10% of U.S. deposits.
- Financial terms of the deal were not made public. However, the average size of deals JPMorgan has made in the past year is smaller than at almost any other point in the past decade, Dealogic found. “It’s less about deal size than it is about strategic impact: what capabilities do we need, and what experiences do we want to deliver?” Leslie Wims Morris, Chase's head of corporate development, told Reuters.
Dive Insight:
Tuesday's deal opens JPMorgan Chase to Frank's customer base of more than 5 million students at 6,000 U.S. colleges and universities. It also cashes in on JPMorgan CEO Jamie Dimon's 2020 pledge to be “much more aggressive with acquisitions across the board.”
The acquisition comes hot on the heels of two other moves the nation's largest bank made this month. It agreed to buy the restaurant platform The Infatuation, which owns the Zagat guidebook and review brand, and to acquire nearly 75% of German car-maker Volkswagen’s payments platform. The bank also said in June it would buy San Francisco-based OpenInvest, a platform that helps financial professionals customize and report on values-based investments.
The bank has also made significant investments overseas, agreeing to buy British digital wealth management platform Nutmeg for a reported £700 million ($972.8 million), and taking a 40% ownership stake in the Brazilian digital bank C6. JPMorgan Chase also launched a digital-only retail bank in the U.K. on Tuesday.
JPMorgan, for its part, exited private student lending in 2013.
“While we do work with students today and obviously have branches in proximity to over 300 universities, this really gives us access to a much larger pool of students," Jennifer Roberts, Chase's head of consumer banking, told CNBC. “We really have a desire to have lifelong, engaged relationships with all of our customers, and [Frank's founder] Charlie [Javice] and her team have built an amazing connection to the student population."
Roberts said one in four Chase customers have children between the ages of 6 and 17, and the bank hopes parents will point their kids toward Chase to open their first checking accounts.
As part of the deal, Javice has joined JPMorgan Chase as the head of student solutions on the bank's digital products team.
“We launched Frank to make college more accessible for students and their families, and have already helped millions across the nation,” Javice said. “We look forward to joining the Chase family to further this mission. Together, we can multiply our impact to help more students and their families achieve their financial goals and education dreams.”
Mike Mayo, an analyst at Wells Fargo, in a comment to Reuters, called the deal "another reason Goliath is winning."
“[Big banks] can go ahead and pick off forward-looking, niche fintech firms and scale them across their global franchise,” Mayo said.
