Israeli-Founded Bluevine Acquired by Valley National Bank for $340 Million

Fintech company Bluevine, founded by Israeli entrepreneurs in 2013 and providing digital banking services to small businesses in the U.S., is being sold to American bank Valley National Bancorp for approximately $340 million. The deal, announced by the bank on Monday, will see about $255 million paid in cash, with the remainder paid in roughly 6.3 million shares of Valley stock. The transaction is expected to close in early 2027, pending regulatory approval. Upon completion, approximately 180 development and engineering staff from the U.S. and Bluevine's Tel Aviv development center will transfer to Valley Bank.

While a significant exit, the sale price is considered modest compared to the company's growth and previous valuations. Bluevine raised around $250 million in equity from investors over the years, plus hundreds of millions in debt and credit lines. Its last known valuation was estimated at $500 million, and in 2023, CEO Eyal Lifshitz discussed a potential Wall Street IPO within 18 to 24 months, which did not materialize. The sale price is slightly higher than the total equity invested.

Bluevine, co-founded by Lifshitz and CTO Nir Kalder, initially focused on invoice financing, allowing businesses to receive immediate payment for outstanding invoices. The company expanded its offerings to include business lines of credit in 2016, a digital business checking account with a debit card in 2019, and played a prominent role in distributing federal Paycheck Protection Program (PPP) loans during the COVID-19 pandemic, facilitating over $4.5 billion to more than 155,000 businesses.

Valley Bank is primarily interested in Bluevine's deposits, which total approximately $2.1 billion from about 175,000 active small business clients. These deposits represent a low-cost funding source, with an average cost of 1.44% in the second quarter of 2026, significantly lower than Valley Bank's average. The bank anticipates the acquisition will boost its earnings per share by about 8% in 2028, largely due to projected annual cost savings of $50 million before taxes.

However, the deal also presents challenges. The tangible book value per share will decrease by about 5% initially, and the bank expects to recover this within three years. Regulatory constraints on debit card interchange fees will likely reduce annual revenue from Bluevine's cards by approximately $20 million. Eyal Lifshitz will join Valley Bank's management team as head of small business banking. The sale reflects a broader trend in the fintech sector since 2022, marked by rising interest rates, a demand for profitability over growth, and increased regulatory scrutiny following the failures of Silicon Valley Bank and other regional banks.