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More Evidence of the Appetite for Tuck-in WealthTech Acquisitions

Yahoo! Finance acquires investor social news network Commonstock in first acquisition since going private

Yahoo Finance announced the acquisition of Commonstock, a social news network with $10 billion of linked assets. It is worth noting that this is the first acquisition Yahoo Finance has made since being taken private by Apollo in 2021 and the arrival of Tapan Bhat, the new head of Yahoo Finance, in 2022. I would not be surprised to see further strategic activity as Tapan and his team look to execute on the growth plan. This also highlights two elements of what we are seeing out there in WealthTech.

One, WealthTech platforms are looking to add functionality as quickly as possible in order to be that "one stop shop" for their clients. This is also true in the RIA space as wealth management platforms race to provide that single "Advisor Operating System" to scale their clients' days. Part of the rush is that "one stop shops" tend to be sticky, so they can't really rely that heavily on turnover once initial demand is met. The race is on.

Two, while the appetite for financial buyer transactions has dried up a bit, at least in comparison to the frothy days of 2021, the appetite for strategic transactions remains strong. While some may argue with us, we place private equity-backed strategics squarely in the strategic camp. Courting private equity-backed strategics requires the same specialized approach as non-private equity-backed strategics and should be treated accordingly.


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