License Acquisitions: The New Strategic Lever in Fintech M&A

In the race to scale fintech offerings across borders, there’s a new premium asset class in town, and it’s not just product or user base.

It’s licensing.

As global fintech players face increasing regulatory scrutiny and extended approval timelines, many are shifting from “build” to “buy” when it comes to regulated market entry. License acquisitions—deals where the regulatory status of the target is as valuable as its commercial footprint—are quietly becoming one of the most strategic moves in fintech M&A.

Why Licensing Has Become a Strategic Asset

Historically, M&A decisions focused heavily on product fit, user base, or tech capability. But as regulators tighten their grip—especially across payments, lending, Banking-as-a-Service (BaaS), and embedded finance—licenses are no longer mere compliance formalities. They are now core to the value proposition.

Obtaining a license can take anywhere from 12 to 24 months (or longer), especially in high-barrier markets like the EU, UK, or UAE. The opportunity cost of waiting—lost revenue, delayed expansion, missed partnerships—is often far greater than the acquisition premium paid for a licensed business.

This shift is especially visible in:

• Payments – buyers acquiring PI/EMI-licensed firms to operate across Europe.
  
  
• Credit – lending licenses acting as gateways to consumer or SME finance.
  
  
• Cross-border players – entities facing varied regulations in every region, increasingly leveraging M&A to localize operations efficiently.

From “Nice to Have” to “Deal Driver”

What used to be a post-acquisition consideration now influences whether a deal happens at all—and at what valuation.

We've observed:

• Buyers prioritizing targets with mature licensing structures despite smaller customer bases.
  
  
• Sellers successfully positioning their compliance teams and regulatory history as premium assets.
  
  
• License transfers (or continuation post-close) becoming central to deal structure and diligence.
  
  

It’s not just about holding a license—it's about how the company uses it, the cleanliness of its compliance history, and its adaptability post-acquisition.

Strategic Implications for Buyers and Sellers

Buyers should treat licensing as integral to target screening—not merely a legal checkbox. Acquiring a licensed entity is often faster, less risky, and more scalable than independently securing licenses, especially for entities looking to enter highly regulated markets swiftly.

Sellers holding regulatory status should recognize and proactively showcase the value of their licenses. That means staying audit-ready, maintaining pristine compliance documentation, and clearly demonstrating how licensing enhances broader market access.

Additionally, entities based outside the EU or UK—such as those from the US, Africa (especially cross-border money remittance providers), UAE, or Asia—are increasingly seeking strategic entry into Europe through licensed entity acquisitions. For these businesses, a European license acquisition can dramatically accelerate market entry and streamline regulatory hurdles.

Our Role at PaymentGenes Capital

At PaymentGenes Capital, we advise both buy-side and sell-side clients on licensing dynamics in fintech M&A. Our support includes:

• Evaluating licensing strategies during target scans.
• Advising on optimal license acquisition structures and timelines.
• Providing advice on the necessary corporate structure and requirements for successful license transfer
• Helping founders position their licensing capabilities prominently—transforming them from afterthoughts into valuable strategic assets.
  
  

As fintech continues to globalize, licenses have become the rails on which deals move—or stall. PaymentGenes Capital has built a specialized team and deep expertise to manage these licensing-driven transactions. 

For more information or to discuss your specific opportunity, please reach out to our team directly.

Simon Stokes or David Nuñez