Gene Lockhart, who parlayed top jobs at First Manhattan Consulting Group, MasterCard, BofA and AT&T into a post-2000 career as a financial tech start-up picker (he's also on the board of Vernon Hill's MetroBank Plc in London), has lately joined Philadelphia's own MissionOG because that firm's cofounders, Andrew Newcomb and his partners from Ecount, the Conshohocken-based prepaid-debit-card outfit, refused to sell Ecount when Lockhart wanted to combine it with his larger rival firm, Netspend. "Three times I tried to acquire them, I could never hit the number they got from Citigroup," which paid $220 million for Ecount in 2008.
These Philly guys are smart, Lockhart figured. Would be more fun to be on the same side, next deal.
So Lockhart has joined MissionOG (after TSYS bought Netspend for $1.4 billion, freeing him for the next round of dealmaking). Already he's broadened MissionOG's outlook to add UK-based Pay4Later (corrected), which funds installment payments for appliances, a business Lockhart says it plans to spread through the U.S., where he says bank regulators have made it tough for traditional lenders to compete: "Say MetroBank wants to offer borrowers with a 620 or 640 (low-ish) FICo score, 24% (APR) loans for a 12-month period, at $125 a month. They connect Metro and four other banks to a merchant that sells that kind of item to that kind of risk profile. Like a Lending Tree."
Pay4Later "has created a tech platform that matches merchants and lenders," says MissionOG cofounder George Krautzel (ex of ITtoolbox). "They have more than 1,000 merchants and six or seven British lenders," which is almost all the big banks in that country. "The platform instanteously matches borrower and lender based on their credit collected. It doesn't need three days for approval." Some merchants pay a bounty so the loan is close to interest-free.
Lockhart praises MissionOG's locally-focused previous investments, like Center City-based Cloudamize and OneTwoSee. "There's no way I could have found them myself," Lockhart told me. "They repackage sports data and sell it to Web site porvider. They are knocking the ball out of the park." He takes credit for introducing OneTwoSee "to some heavy hitters." Heavy viewer-data hitters? "Could be Nielsen. This is all about tracking."
In the UK, PayForLater "is doubling every year," Lockhart says. "It's perfect for MissionOG." Another company he bought into, Progressive Finance, was sold to Aaron's (they own Aaron's Rents) for $700 million in April. He says PayForLater should be lending in the U.S. by early next year.
Lockhart stops by to visit his Philadelphia partnerabout once a month. They're raising around $50 million for a new fund. "We've made about five investments from that fund to date. That's a pipeline we could double tomorrow." (Revised)