Pagaya Technologies Ltd., an AI technology platform which enables financial service providers to automatically process loan applications, announced it had entered a definitive business combination agreement with EJF Acquisition Corp. (EJFA) to become a publicly listed entity, according to a press release sent to FinLedger.
As a result of the transaction, which values the combined company at approximately $8.5 billion at closing, Pagaya is expected to start trading under a new ticker symbol on the NASDAQ in early 2022. 94% of existing equity holders, including investors and employees, are expected to retain their ownership stakes in the company.
The merger has been unanimously approved by the board of both companies.
New York- and Tel Aviv-based Pagaya utilizes an automated AI network to offer banks, lenders, merchants and other fintechs data analysis and risk-assessment integration via API, according to the Wall Street Journal.
Founded in 2016, the company has processed over 17 million applications in the last 12 months as of June 2021, across unsecured consumer, auto, credit card, point-of-sale (PoS) and real estate markets. Second quarter sales grew to approximately $95 million, and Pagaya hopes to extend its coverage to mortgage and insurance products in the future, according to the Wall Street Journal.
According to the release, Pagaya posted $4.7 billion annualized network volume in the second quarter of 2021, with 198% network volume growth over the year prior. The agreement also includes $288 million in gross proceeds from EJFA’s cash in trust and $200 million in gross proceeds from entities associated with EJFA.
Last year, it raised $102 million in a private funding round led by Singapore sovereign wealth fund GIC. Other investors in the round included insurer Aflac Inc’s Aflac Global Ventures, Bank Hapoalim’s Poalim Capital Markets, Viola and Harvey Golub – the former CEO of American Express
“Legacy systems are historically fractured and inefficient. We identified a significant opportunity to address the inefficiencies of the current system by constructing a network powered by our proprietary A.I. technology,” Pagaya co-founder and CEO Gal Krubiner stated in the release.
Our combination with EJFA allows Pagaya to combine our expertise with EJF’s deep financial experience. Together, we can continue to expand a leading artificial intelligence network to help our partners grow their businesses and better serve their customers,” said Krubiner.
In other recent fintech news, cross-border API developer Zonos raised a $69 million Series A, led by Silversmith Capital. Insurtech payment infrastructure platform Ascend also raised a $5.5 million seed round with a goal of introducing BNPL to commercial insurance providers.