Marqeta’s [NASDAQ:MQ] falling stock price has buyout firms circling the financial technology provider to “kick the tires” on a potential deal, according to three sources close to the situation.

Over the last week, Marqeta’s stock price plunged 40% after it reported revenue for the third quarter that fell just shy of estimates and it issued weaker-than-expected guidance for 4Q.

Its market capitalization already fit the profile private equity firms seek when looking for takeout targets, but last week’s reduced valuation makes it even more attractive, the sources said.

Would-be buyers view Marqeta as a valuable target due to its modern financial products that are positioned to capitalize on the growing demand for innovative payment solutions, they said.

The credit and debit card-issuing platform had a market cap of USD 1.9bn at the close of trading on Friday. Marqeta’s stock has lost 88% of its value since it peaked in 2021.

Financial services providers such as Mastercard [NYSE:MA] and Visa [NYSE:V] could join buyout firms in considering a bid for Marqeta, as could other fintechs like Block [NYSE:SQ], Global Payments [NYSE:GPN], Fiserv [NASDAQ:FISV], or FIS [NYSE:FIS], the sources said.

A spokesperson for Marqeta declined to comment.

In an interview at Money 20/20 in Las Vegas two weeks ago, Marqeta Chief Revenue Officer Todd Pollak said it routinely discusses potential partnership ideas with other financial services providers.

In recent months, Marqeta has struck strategic partnerships with Varo Bank, Visa, and Zoho. It also launched a product called Marqeta Flex to bring buy-now, pay-later services from Affirm [NASDAQ:AFRM] and Klarna to any card where Mastercard and Visa are accepted.

With USD 1.1bn in cash and short-term investments, Marqeta keeps an eye out for bolt-on acquisitions that it could make to accelerate growth in new markets, Pollak said. It is also interested in businesses with wage-access or consumer and commercial credit products, he added.

In early 2023, Marqeta acquired credit card program management platform Power Finance for USD 275m in cash, which marked the first acquisition in the company’s 13-year history.

The integration of Power Finance took about six months to complete, Pollak noted. The deal added a rewards engine to Marqeta’s platform along with a toolbox to embed experiences inside applications to enable clients to launch a wider range of credit products and constructs.

Marqeta is moving upmarket with larger enterprise customers, the executive added.

Although the modernization of payments began more than a decade ago, advances in issuer processing only gained momentum in the last five years and is still in the early stages, CEO Simon Khalaf explained in last week’s earnings call, noting that Marqeta accounts for only 2% of that volume in the markets in which it operates, leaving ample room for growth.

For 3Q, Marqeta reported a total processing volume of USD 74bn, a 30% increase compared to the same quarter last year. Net revenue was USD 128m compared to USD 128.1m expected.

For 4Q, it guided a revenue increase of 10% to 12% from a year earlier, below expected growth of more than 17%, according to a survey of analysts by the London Stock Exchange Group.

Founded in 2009, Marqeta went public in June 2021. Its top institutional holders include Vanguard Group, Blackrock, Fidelity Management & Research Company, and Visa.

Goodwin provides legal advice to Marqeta.