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AMSTERDAM – Enterprise payments startup Payhawk told CNBC it is planning mergers and acquisitions to expand its presence in the world of corporate expense management and attract major players such as GLANDERS.
Payhawk said it is considering acquiring a Stage A company or companies, meaning early-stage startups that have already raised a significant round of funding.
In an interview with CNBC, Christo Borisov, Payhawk’s co-founder and CEO, said he believes his firm is better “suited to the product market” than its competitors, which have achieved multibillion-dollar valuations by handing out free corporate cards to other startups. .
“We see an opportunity to improve the unit economics of this business,” Borisov told CNBC at the Money 20/20 conference in Amsterdam this week. “We believe that companies like Brex and Ramp have not yet found a strong product market suited to what this potential market will be.”
Payhawk is a corporate expense management platform that issues smart cards to clients’ employees so they can make payments and track their expenses. Her clients include Decathlon and Vinted.
Game title merging
Payhawk saw huge growth in the first quarter, the company told CNBC. It found that revenue grew 86% year-on-year globally, with sales jumping 127% in the UK – a market that now accounts for 27% of total revenue.
Payhawk’s growth was made possible by a significant increase in the number of clients. The firm said it saw a 58% increase in client numbers in the three months ending March compared with the same period last year, with the UK again the main driver.
Payhawk now wants to build on that growth through mergers and acquisitions, which will be key to unlocking future opportunities, Borisov said.
“Many businesses that have received funding in the last two to three years are now in a position where they are considering strategic options,” Borisov said. “We are actively pursuing this. We are looking for companies to buy.”
“Our vision is to provide a single platform that provides the homogeneous environment you need for your enterprise spend with a single vendor,” he said. “There is some market consolidation happening.”
According to him, Borisov is not looking for companies in the US market to acquire, adding that in the US Payhawk is a partner American Express as part of the credit card giant’s Sync commercial partner program.
Goal to become a public company
When asked if his firm is looking to raise new venture capital funding to achieve its goals, Borisov said Payhawk is always in talks to raise funds.
The economy’s rebound over the past year has sparked interest from outside investors after a tougher 2022 and early 2023, he added.
“Fundraising is happening every day,” he said. “It’s not because we need money. The worst time to raise funds is when you need them.”
“We communicate with investors every day, understanding where the market is,” Borisov added. “Partners who believe in this vision see the same thing.”
Payhawk may try to raise a new venture round either this year or next, Borisov added. The firm, backed by venture capital firms Lightspeed, Greenoaks and Earlybird, has raised $240 million to date.
He said his ultimate goal is for Payhawk to become a public company, although the date for the company’s public market debut is not yet known.
“Our ultimate goal is to carry out an IPO of the company, this is what we are focused on,” Borisov said. “It really depends on market conditions and market realities.”