Atlanta-based fintech startup Gro Solutions, which helps small and mid-sized banks and credit unions improve customer acquisition with a digital sales platform, has been acquired by a public financial software company, Q2 Holdings. All of Gro’s employees will remain on the team and the Atlanta office will become an outpost of Austin-based Q2’s operations.
The acquisition comes just two years after Gro raised its Series A funding round of $4.3 million, led by TTV Capital. David Eads, co-founder and CEO of Gro, tells Hypepotamus that the company had been seeing a strong uptick in demand for their digital tools.
“At the end of the first quarter, we saw that the inflection point we were waiting for in the market had happened. Banks were realizing that this is something that they absolutely must have and the stampede was starting to happen,” he says.
Gro’s platform lets new bank customers open and fund an account from their computer or mobile device in less than four minutes. They mostly serve financial institutions that aren’t large enough to have their own in-house technical team.
Q2 also provides digital tools for banks and financial institutions, including online deposits, money movement, lending, leasing, security and fraud prevention. Last month, they completed another acquisition of a cloud-based lending and leasing platform.
Eads says that Gro fits perfectly into the end-to-end digital banking solutions that Q2 offers customers. He’s enthusiastic about the potential to cross-sell their respective customers and offer clients a more complete toolbox.
“They’re describing us as sort of like the glue between a lot of their acquisitions,” Eads says. “Plugging us in allows a clear path for providing a world-class experience from marketing and sales, all the way through fulfillment and underwriting and day-to-day customer experience.”
He also mentions a strong culture fit.
“We kind of feel like we’re their spiritual little brother,” Eads says. “We’re scrappy, we see the world the same way, we’re interested in financial inclusion and in solving a big problem that hadn’t been solved before.”
TTV Capital partner Sean Banks tells Hypepotamus that the firm is “pleased” with the acquisition. “Gro is another great example of entrepreneurs in the Atlanta Fintech ecosystem creating a technology solution to further the revolution of the delivery of modern financial services,” he says.
Gro currently employs 25 in their Midtown, Atlanta office. Eads will become a VP within the sales division of Q2 and all other executives and employees will remain on-board.
Q2 reported its revenue growth in the third quarter of 2018 was 21 percent, exceeding its own projection, though the company remains unprofitable.
Disclaimer: One of Hypepotamus’s founding investors is also an investor in Gro Solutions. This individual did not contribute to reporting or editorial decisions.