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As per TechCrunch, Capital One Digital Labs – a wing of Capital One Financial Corp. (COF - Analyst Report) – has purchased nearly all assets of the New York-based data aggregator, Bundle Corp. Either of the parties have not disclosed the terms of the deal.
Along with the substantial asset purchases, Capital One has retained Bundle Corp’s CEO and eleven of its employees in its Capital One Digital Labs.
Bundle Corp was launched in 2010 as an online means of comparing spending habits by the buyers. As spending data is an enhanced indicator of a consumer’s actual preference and better highlight the best local businesses, Bundle Corp found it attractive to deal with.
Last year, Bundle had access to data from Citigroup, Inc. (C - Analyst Report) and other third-party providers pertaining to around 20 million credit cards of Visa, Inc. (V - Analyst Report) and Mastercard Incorporated (MA - Analyst Report). Bundle also had access to public data from the U.S. Government.
As for Capital One, technology has been the focal point of its business model since its inception. The company was one of the few, which initiated the process of obtaining data to segregate the credit card users into specific categories and then sell each user a card as per his needs.
With the acquisition of Bundle Corp, Capital One will be able to expand it business. Capital One stated that it is planning to utilize the data available from spending and local directory data of Bundle Corp to provide its own clientele a range of new data-driven products.
This will provide consumers with better information to decide on purchase and spending decisions. By retaining the management team, Capital One will further solidify its personnel strength. All these would prove accretive to its financials going forward.
In the last couple of years, Capital One has made some really impressive strategic acquisitions, such as the purchases of HSBC Holdings plc’s (HBC - Analyst Report) credit card business and ING Direct USA – the online banking unit of ING Groep NV (ING - Snapshot Report).These acquisitions have resulted in augmented revenue for the company and we continue to believe that synergies from all these will benefit the company.
Capital One currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain a long term Neutral recommendation on the shares.
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