Q2's Acquisition of Gro Came Through an Investor Introduction

The digital banking software provider Q2 Holdings announced yesterday it had acquired Atlanta-based digital sales platform Gro Solutions. This acquisition, the second of the year for Austin, Texas-based Q2 , came about through a shared investor, Gro CEO David Eads told Bank Innovation . Q2 announced it was buying Cloud Lending, a cloud-based lending platform, in August. In 2017, the company acquired Unbill and quickly turned the product into a Q2 offering called Biller Direct . Gro's products include digital engagement tools, particularly tools that reduce friction in onboarding and checkout. The term "checkout" is not commonly used in a banking context, but is inspired by Amazon, known for its superlative user experience and loyal customers. "We even use the term 'Add to Cart,'" Eads told Bank Innovation earlier this year. But account-opening may be where Gro is best known in fintech, because it is such a pain point across the industry. "We cracked the code on retail account opening," Eads said. "But business accounts are where they make their money. Tools are still behind for businesses." As to the Q2 connection, Eads said it came from, "Many interconnections. But the key introduction was the one of Croft & Bender, who was an investor in us, and was an early investor in Q2. We were already talking about this, where do we go in the future, another round of funding or strategic partner? We got to talking [with Q2] and there was an incredible cultural fit. We were both asking, 'How do you make banks and credit unions stronger?'" Gro employs about 25 people, including contractor, Eads said, and all will be moving on to Q2. It has about 50 FI customers. "We believe this is a big win for our customers," Eads said. "As a startup, you never have as many resources as you want to have." Of his role at Q2, Eads said, "I’m going to focus on revenue, digital sales and marketing. Q2 has an account-opening solution, so we will merge them and take the best of both." "For 2018 and 2019 we saw the market hitting an inflection point," Eads said. "And it proved our hypothesis -- banks need to embrace selling their products using digital means. We saw tremendous value in what we were doing." Clearly Q2 agrees.

Q2’s Acquisition of Gro Came Through an Investor Introduction

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