Betsy Zubrow Cohen may be based in New York, but her legacy is here in Philadelphia. She is, as the Inquirer’s Joe DiStefano put it, “the matriarch of a Philadelphia financial/energy/real estate family empire.” The septuagenarian is now stepping into the tech scene.
Cohen’s FinTech Acquisition Corp., a publicly-traded company, has acquired King of Prussia fintech company CardConnect for $350 million. CardConnect plans to go public, post-acquisition. It’ll apply to list on the Nasdaq.
“In general, the management team at CardConnect would like to run this company forever and grow it to as large as it can be,” said CardConnect CEO Jeff Shanahan. “We always thought going public would provide us the best path to do that.”
He said that CardConnect has long been “opportunistic” with acquisitions — it has acquired more than a dozen companies since its founding in 2006 — and this will allow them to do that faster. CardConnect’s management team will also have a bit of a larger ownership stake in the company, post-acquisition, Shanahan said.
FinTech Acquisition, which filed for a $100 million IPO last year, is a blank check company, which means it was designed solely to look for a company to acquire. It bought out CardConnect’s previous owners, a San Francisco private equity firm called FTV Capital that invested $50 million in 2010. It was FinTech Acquisition that approached CardConnect and they started discussions in May of 2015, Shanahan said. The timing was right, he said: it was “the natural point in the PE cycle where we knew [FTV] would want to exit.”
This is the second tech company this year that’s made moves to go public. South Jersey health IT firm Tabula Rasa filed for an $115 million IPO in January. And CardConnect almost wasn’t a Philly company — it relocated here in 2013, bringing roughly 30 employees from Chicago and Cleveland to King of Prussia.
Shanahan, who was the company’s president at the time of the move, said he wanted to return to Philadelphia, where he lived before launching CardConnect and where his wife is from (Wayne, specifically). He also wanted to tap into Philadelphia’s talent pool, since he had struggled to grow the company in Cleveland. It worked. CardConnect has tripled its local staff to 90 and employs 150 overall.
“We’ve been thrilled with the move,” said Shanahan, who lives in Devon.
He said CardConnect is committed to growing in Philadelphia. They recently moved into a 27,00 square-foot office on the third floor at 1000 Continental Dr in King of Prussia, consolidating their team onto one floor since they were previously split between two in their former office.
The business is a family affair for Shanahan (like the Cohens). His brother, Brian Shanahan, cofounded the company and remains chairman of the board, while his brother Patrick Shanahan is the COO.
New York is a clear fintech hub and there’s action in Delaware, too, but Philly does have a small but active community. There’s eMoney Advisor, which was acquired by Fidelity for more than $250 million; Chaikin Analytics, which is angling to get acquired; Moven, whose tech team is based in Radnor and, of course, CardConnect.
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