Less than four months after GeoComply Solutions secured its second round venture funding, the company on Monday (May 8) acquired OneComply, a firm that manages personal and corporate gaming licensing obligations.
GeoComply executives said the acquisition would allow the company to offer its geolocation customers in gaming, fintech and other regulated industries a process to handle initial licensing and ongoing compliance management.
“There’s only one letter difference in the logo, so the rebranding exercise seemed to be easier,” David Briggs, co-founder and director of special projects, sarcastically told VIXIO GamblingCompliance during an interview on Friday (May 5).
Terms of the deal were not disclosed. Briggs admitted that GeoComply was already a OneComply customer, which allowed the company to “remove a lot of the brain damage around personal and corporate licensing.”
Briggs added that fellow Vancouver-based company OneComply has an overlapping customer base with GeoComply, which provides geolocation services to verify online gaming and sports-betting transactions are placed in compliance with state and federal laws.
“But to go to 100 or 200 or 300 customers, that’s when GeoComply can help their [technology] team to manage their servers, security, finance team and marketing,” he said. “I don’t want to come across as I’m altruistic, but I’ve never met anyone in the gaming industry that isn’t going to find using OneComply a massive boom in their lives.”
Briggs used OneComply client Sightline Payments as an example, which has several money services business licenses.
He said the process between applying for a money transmission license and a gaming license are similar, so the growth challenge is expanding within the gaming industry before branching out into other industries.
“There are something like 25,000 entities in North America that need to be licensed,” said Marco Stotani, GeoComply’s director of corporate development. “Every entity will have two or three executives and even more when you increase the size of the client, so the opportunity is big.”
Founded in 2019, OneComply, a fellow Vancouver-based privately held company, currently has around 50 clients.
Briggs acknowledged that the traditional state licensing process can be difficult for gaming executives, but the process was about keeping the bad actors out of the industry.
Without a service like OneComply, Briggs said, executives have to file college certifications or bank statements to multiple regulatory agencies individually, with a licensing official at their company having to store personal information for every qualifying individual.
“So if you look at the friction points around personal information that were being replicated across these companies, OneComply says, 'fill in the forms once',” Briggs said.
As companies expand to new states, Briggs said, OneComply automatically duplicates the PDFs for all the other forms, so clients may have all the documents required by Louisiana regulators and may only need to update bank statements depending on when the file was completed.
Briggs also credited OneComply with solving the problem of having to get fingerprints taken in person in each U.S. jurisdiction by allowing a licensee to have their fingerprints done digitally, so every time there is licensing submission, the company can print out a person’s fingerprints to submit with an application.
When asked how long it would take to integrate OneComply into GeoComply, Briggs said OneComply would instead remain a totally standalone business.
In January, GeoComply secured its second round of private-equity investment from Norwest Venture Partners, a division of Wells Fargo, and Arctos Sports Partners. Specifics of the investments were not disclosed.
That was followed in February, however, by Federal Judge William J. Bryson in Delaware granting geolocation competitor Xpoint’s motion to dismiss a patent infringement case filed by GeoComply.
“It was the second investor round for the company since 2021, when Blackstone Group and Atairos invested into the business,” Stotani said. “GeoComply is very well positioned in the business, so that is why we received so much interest. The idea is to help us expand the business not only in gaming but outside of gaming.”
Stotani noted that GeoComply's investors have a lot of experience with mergers and acquisitions, but this deal, in particular, was not driven by the investors pushing for M&A.
“[CEO and co-founder] Anna [Sainsbury] and I are very clear that M&A could play a large part in our future as we grow,” said Briggs, who co-founded the company with his wife in 2011.
“If and when we really wanted to do a transformational M&A deal, we have great partners to help us do that.
“But for me and Anna it is not a question of access to capital, it is a question of what is the right deal to do and what makes sense for the company,” Briggs added. “We don’t believe in doing M&A for the story.”