ValueAct, an activist investor, has gotten a seat on Fiserv’s board because of a settlement with the FinTech and payments firm, Bloomberg reported Wednesday (Feb. 23).
Fiserv said in a statement that it had appointed Dylan Haggart, a ValueAct partner, to its board. He will also be nominated at the company’s next annual general meeting.
ValueAct first disclosed its stake in Fiserv in August. At the time it said it thought the company’s Clover credit card processing business could be worth $185 billion by 2024.
Shares of Fiserv were down 1% in trading Wednesday.
In a letter, ValueAct said that while Clover competitor Square invented the cloud-based, point-of-sale (POS) tech that Clover uses, Clover is the leader of that now.
This, according to Bloomberg, is because Clover has tapped into the Fiserv customer base and existing distribution channels. The company has now annual transactions of around $185 billion — 20% more than Square, and $1.5 billion in yearly revenue.
“Fiserv’s opportunity is relatively straightforward: develop great products that match the disruptors’ capabilities and sell these into its huge customer base,” ValueAct said in the letter.
Bloomberg also reported that ValueAct had increased its position in the company to $1.3 billion. The investment was compared by ValueAct to similar ones made at Adobe Inc., Microsoft and Seagate Technology Holdings.
The firm said this kind of theme, where incumbent tech firms transform themselves, wasn’t a novel one — it has experience in those other companies.
Read more: Report: Activist Investor Sees Clover Worth $185B By 2024
PYMNTS reported last August on the ValueAct initial investment in Fiserv.
ValueAct has bought positions in, and advocated for change in, even much larger companies like Citigroup and Microsoft.
An investor presentation said the company believes “there is more money to be made investing behind incumbents transforming themselves than there is betting on disruptors.”
“Fiserv checks all our boxes as a digital transformation candidate,” it said.
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NEW PYMNTS DATA: ACCOUNT OPENING AND LOAN SERVICING IN THE DIGITAL ENVIRONMENT
About: Forty-two percent of U.S. consumers are more likely to open accounts with FIs that make it easy to auto-share their banking details during sign-up. The PYMNTS study Account Opening And Loan Servicing In The Digital Environment, surveyed 2,300 consumers to examine how FIs can leverage open banking to engage customers and create a better account opening experience.
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