Private equity firm Falfurrias Capital Partners has tapped Florida credit union (CU) consulting startup Engage Fi to be one of the recipients of its $850 million investment fund, the Tampa Bay Times reported Friday (Feb. 11).
Engage Co-Founder and CEO Jenn Addabbo did not disclose the size of the investment but noted in the report that it led to her firm adding three directors to round out the company’s five-person board.
Engage had looked at 10 equity firms before deciding on Falfurrias, according to the report.
“They have a tremendous amount of knowledge in the financial institution services space, and technology enablement, and they want to pour gasoline on the fire,” Addabbo said in the report.
Founded in 2014, Engage Fi employs 40 people and has more than 160 clients, including Grow Financial, MidFlorida Credit Union and GTE Financial, the report stated.
“The market opportunity for us to continue to expand our services and our existing customer base and go after a new, larger market in community banks is significant,” Addabbo said in the report. “The opportunity is massive.”
Including the oversubscribed $850 million fund backing Engage Fi, Falfurrias has raised $1.9 billion across five funds, according to the report.
The funding comes at a time when CUs are facing a variety of challenges.
Read more: 3 Challenges Facing Credit Unions
While CUs keeping attracting new members, many of them have a tougher time keeping these members from turning to other financial institutions for some banking products or services.
Brian Scott, senior vice president and chief growth officer at PSCU, said solving this issue will require CUs to pair personalization and customer service expertise with the newest digital offerings to entice back members testing the waters with brands like Stripe, Square and other FinTech heavy hitters.