Corporate payments startup Payhawk is gearing up for mergers and acquisitions to strengthen its position in the corporate spend management sector and compete with industry giants like SAP. The company is particularly interested in acquiring early-stage startups that have already secured significant funding.
Hristo Borisov, Payhawk’s CEO and co-founder, highlighted the company’s superior “product-market fit” compared to rivals that have achieved multibillion-dollar valuations by offering free corporate cards to other startups. “We see an opportunity to have much better unit economics in this business,” Borisov said at the Money 20/20 conference in Amsterdam. He believes that companies like Brex and Ramp have yet to establish a strong product-market fit for the future potential of this market.
Payhawk provides a corporate spend management platform that issues smart cards for employees to make payments and track expenses. Notable clients include Decathlon and Vinted. The company reported substantial growth in the first quarter, with global revenue climbing 86% year-over-year and U.K. sales increasing by 127%, making up 27% of overall revenue.
This growth was driven by a 58% increase in customers year-over-year for the three months ending in March, with the U.K. playing a significant role. To build on this momentum, Payhawk is focusing on mergers and acquisitions. “Many businesses that got funded in the last two or three years are now looking at strategic options,” Borisov noted. “This is something we’re actively pursuing. We’re looking for companies to buy.”
Borisov envisions creating a single platform that offers a comprehensive environment for corporate expense needs with a single provider, indicating a potential market consolidation. He clarified that Payhawk is not seeking acquisitions in the U.S. market, where it partners with American Express under the Sync Commercial Partner Program.
Regarding future funding, Borisov stated that Payhawk is always engaged in fundraising conversations, driven by renewed growth and external investor interest following a challenging period in 2022 and early 2023. “Fundraising is everyday,” he said. “It’s not because we need money. The worst time to fundraise is when you need the money.”
Payhawk may raise a new venture round either this year or next. The company, supported by venture firms Lightspeed, Greenoaks, and Earlybird, has raised $240 million to date. Borisov’s ultimate goal is for Payhawk to become a publicly listed company, though no specific timeline has been set for its IPO. “Our ultimate goal is to IPO the company. This really depends on market conditions and realities,” he added.
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