The CEO and founder of a fintech co-owned by JPMorgan Chase is suing the bank for allegedly trying to impede company growth, the Financial Times reported Thursday.
Viva Wallet, a Greek fintech in which JPMorgan has held a 48.5% stake since 2022, is being blocked from entry in the U.S. and some European markets in an effort to keep its valuation down, Viva Wallet CEO Haris Karonis alleged in documents filed in London’s High Court and seen by the publication.
Karonis also alleged that JPMorgan’s payments business is allowed to compete with Viva in some markets, further limiting growth, according to the report.
JPMorgan bought its stake in Viva for €800 million in 2022. The terms of the deal state that JPMorgan will be allowed to take full control of Viva if it’s valued at less than €5 billion by July 2025.
At the time, Takis Georgakopoulos, JPMorgan’s global head of payments, said the bank was “very excited to make a strategic investment in Viva Wallet to support their vision to empower new growth and payments innovation targeted at European small and midsize businesses (SMBs) and middle market merchant services clients.”
“The European payments landscape is fragmented yet large in terms of opportunity, with more than 17 million merchants ready to implement scalable payments solutions and this is a big focus area for added growth for J.P. Morgan Payments in the future,” Georgakopoulos said at the time.
Georgakopoulos received praise from JPMorgan CEO Jamie Dimon at investor day that year for sourcing the deal.
Now, however, the fintech and the bank are at odds, with Karonis’ holding company, WRL, challenging the details of JPMorgan’s option to purchase Viva because they create “perverse incentives” for JPMorgan to limit Viva’s growth. JPMorgan executives, on the other hand, don’t think Karonis understands that valuations of fintechs like his own have plummeted in the past two years, people familiar with the bank’s legal approach told the Financial Times.
JPMorgan also filed a claim against Karonis over alleged efforts to “limit or circumvent our contractual and legal rights as an investor,” sources told the publication.
The two firms also don’t see eye to eye on Viva’s valuation: JPMorgan and its valuer, Houlihan Lokey, value Viva, which operates in 24 countries, at €1 billion, while Viva’s valuer, EY, asserts it’s worth €3 billion.
“This action was filed after exhausting all other options,” JPMorgan said in a statement to the Financial Times regarding the bank’s claim against WRL. “Despite this dispute, we believe in Viva Wallet, its people, our strategic investment in the company and our wider business in Greece.”
This is not the first time JPMorgan has butted heads with a fintech it bought. The bank is still waging a court battle against Charlie Javice, founder of Frank, a college financial planning fintech it purchased in 2021.
JPMorgan sued Javice and a second Frank executive in December 2022, accusing them of vastly exaggerating the platform’s customer base, then creating fake student accounts to back up the claims.
Javice claimed Frank had 4.25 million users, but the platform’s actual customers numbered fewer than 300,000, JPMorgan said in its suit.
The Justice Department charged Javice with wire fraud, bank fraud, securities fraud and conspiracy to commit bank and wire fraud in April 2023. The Securities and Exchange Commission, additionally, charged Javice with fraud.
She pleaded not guilty in May.
