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AMSTERDAM, Netherlands — Payhawk, an enterprise payments startup, told CNBC that it is planning mergers and acquisitions to expand its presence in the U.S. and take on major players in the space JUICE and venture capital-backed companies Brex and Ramp.
The startup said it wants to acquire one or more U.S. companies in the Series A phase of their development, referring to early-stage startups that have already raised a significant round of funding.
In an interview with CNBC, Hristo Borisov, CEO and co-founder of Payhawk, said that he believes his company is a better “product-market fit” than its competitors, which is generating multibillion-dollar valuations by distributing free corporate cards to other startups have .
“We see an opportunity to achieve much better unit economics in this business,” Borisov told CNBC this week at the Money 20/20 conference in Amsterdam, Netherlands. “We believe that companies like Brex and Ramp still have not found a strong product that is suitable for this potential market.”
Payhawk is an enterprise expense management platform that issues smart cards to customers’ employees so they can make payments and keep track of their spending. Customers include Decathlon and Vinted.
In the US, Payhawk has partnered with American Express as part of the credit card giant’s Sync Commercial Partner Program. This allows for the issuance of virtual cards that earn rewards based on user spending.
Consolidation is key
Payhawk saw tremendous growth in the first quarter, the company told CNBC. It revealed that year-on-year sales rose 84% globally and sales rose 127% in the UK – a market that now accounts for 27% of total sales.
Payhawk’s growth was driven by a significant increase in customers. The company said it recorded a 58% year-on-year increase in customers in the three months to March, with the UK again a key driver.
Now, Payhawk wants to significantly expand its presence in the U.S. — and mergers and acquisitions will be a key to unlocking that growth, according to Borisov.
“Many companies that have received financing in the last two or three years are now in a position to look for strategic options,” Borisov said. “This is something we actively do. We’re looking for companies to buy.”
“Our vision is to provide a single platform that delivers the homogeneous environment your enterprise spend needs with a single provider,” Borisov said. “There will be some market consolidation.”
The goal is to become a stock corporation
Asked whether his company was looking to raise new venture funding to achieve its goals, Borisov said Payhawk was constantly engaged in fundraising discussions.
He added that its renewed growth last year had attracted interest from outside investors after a more difficult 2022 and early 2023.
“Fundraising is everyday life,” he said. “It’s not because we need money. The worst time to fundraise is when you need the money.”
“We talk to investors every day and understand where the market is,” Borisov added. “Partners who believe in this vision see it the same way.”
Payhawk may look to raise a new venture round either this year or next, Borisov added. The company, backed by venture firms Lightspeed, Greenoaks and Earlybird, has raised $240 million to date.
He said his ultimate goal is for Payhawk to become a publicly traded company, although there is no date yet for the company to go public.
“Our ultimate goal is to take the company public, we are focusing on that,” Borisov said. “It really depends on market conditions and market realities.”
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2024-06-06 06:05:01
www.cnbc.com
