Upbound Group, a technology and data-driven leader in accessible and inclusive financial products that address underserved consumers’ evolving needs and aspirations, announced it has entered into a definitive agreement to acquire Brigit, a leading financial health technology company.
The deal, which includes cash and shares of Upbound common stock, could be worth up to $460 million. It is a logical next step reflecting Upbound’s strategic focus on expanding its technology-driven financial solutions for consumers underserved by the traditional financial system.
Brigit, which offers a subscription-based model, was launched nationally in 2019 to expand financial inclusion and help consumers build a brighter economic future. It is consistently ranked among the most downloaded financial health apps and is a recognized leader in innovation in the industry.
Built on proprietary AI/ML-powered cash flow data insights, Brigit’s core product is its direct-to-consumer Instant Cash advance (earned wage access, or EWA), which has saved its users about $1 billion in overdraft fees since its inception. Brigit also offers a credit builder product that helps its subscribers build their credit history over time as they increase their savings, financial wellness solutions, and educational resources to help consumers better manage, save, and earn money.
Brigit currently serves nearly two million monthly active customers, including over one million active paying subscribers and almost one million free subscribers. Their customers are highly engaged, with paid users logging in on average six times monthly. The business is expected to generate approximately $215 million to $230 million in 2025 and roughly $350 million to $400 million in 2026.
Brigit will expand Upbound’s offerings of flexible financial solutions, positioning the combined company to create an industry-leading technology platform for the financially underserved that meets the consumer wherever they are on their financial journey.
Brigit’s proprietary data and sophisticated tech stack are expected to enhance Upbound’s existing brands, including Acima and Rent-A-Center (RAC), by improving risk management and fraud prevention, enabling more customer approvals while mitigating net losses and enhancing account management. The combined company’s data-driven insights will create a more personalized customer experience with the ability to deliver, at the right time and through the right channels, a wider range of targeted solutions for consumers. Upbound expects these enhancements to boost conversion rates, lower churn, and increase customer loyalty and engagement.
Brigit founders Zuben Mathews and Hamel Kothari will continue leading the Brigit team as a business segment of Upbound. And Brigit will continue to operate under its existing branding and retain its headquarters in New York City, which is expected to serve as one of Upbound’s innovation hubs.
Upbound is buying Brigit for up to $460 million, comprised of (1) $325 million payable at closing, 75% in cash and 25% in Upbound shares; (2) $75 million in deferred cash consideration over two years; and (3) a potential earnout of up to $60 million in cash based on achievement of certain financial performance metrics for the Brigit business in 2026. And Upbound will fund the transaction through a combination of cash on hand, borrowing capacity under its $550 million revolving credit facility, and issuance of new shares of Upbound common stock to Brigit stockholders.
The integration of Brigit’s scalable platform is expected to expand Upbound’s addressable market outside of durable goods and enhance its strong financial profile while adding a complementary growth segment. And with about 80% recurring subscription revenue and an estimated total revenue growth in 2024 of 40% to 50% compared to 2023 with similar expectations in 2025, Upbound believes the transaction will accelerate its growth and is expected to be neutral to non-GAAP EPS in year one and meaningfully accretive to non-GAAP EPS in year two and beyond. Brigit will diversify Upbound’s revenue/Adjusted EBITDA mix; within the next four years, Upbound expects approximately two-thirds of revenue and Adjusted EBITDA will be derived from virtual and digital platforms.
Following the deal, Upbound expects pro forma net leverage ratio of approximately 3×4 and pro forma available liquidity of nearly $300 million. Upbound continues to target leverage of approximately 2x over the long term.
The acquisition is expected to close in Q1 2025, subject to receipt of requisite regulatory approvals and satisfaction of other customary closing conditions.
Greenhill & Co. is acting as financial advisor to Upbound, and Sullivan & Cromwell and Mayer Brown are acting as its legal counsel. FT Partners is acting as financial advisor to Brigit and Cooley, and Morgan Lewis & Bockius is acting as its legal counsel.
KEY QUOTES:
“We are thrilled to welcome Brigit, a company whose mission and target customer base are closely aligned with ours, into our family of brands. Creating a financial solutions platform with Brigit as the backbone expands our addressable market and enables Upbound to innovate across even more product categories to improve the financial health of our customers. The ability to add new products for our customers beyond lease-to-own is an important part of our strategy and now we can offer liquidity solutions, budgeting, credit building, financial literacy and savings. We believe this transaction will position Upbound for accelerated growth, with greater scale and a more diversified financial profile, ultimately driving long-term value for our shareholders.”
- Upbound’s Chief Executive Officer Mitch Fadel
“Brigit has helped everyday Americans build a brighter financial future through a suite of innovative financial products that leverage cutting-edge cash flow technology. This transaction is a testament to our team’s continued passion for helping the underserved and our dedication to innovation. By combining forces with Upbound, we can accelerate our impact and better serve the millions of Americans who have been historically underserved by traditional financial institutions. Together, we are excited to widen our reach and bring financial freedom to even more people in need.”
- Brigit cofounder & CEO Zuben Mathews
