Company card unicorn Payhawk plans acquisitions to increase in US

AMSTERDAM, Netherlands — Company funds startup Payhawk instructed CNBC it’s planning mergers and acquisitions to develop its footprint within the U.S. and tackle massive gamers within the house like SAP and venture-backed corporations Brex and Ramp.

The startup stated it’s trying to purchase a U.S. firm or firms on the sequence A stage of their improvement, referring to early-stage startups which have already raised a big spherical of funding.

In an interview with CNBC, Hristo Borisov, Payhawk’s CEO and co-founder, stated he thinks his agency has a greater “product-market fit” than its rivals, which have gained multibillion-dollar valuations by handing out free company playing cards to different startups.

“We see an opportunity to have much better unit economics in this business,” Borisov instructed CNBC on the Cash 20/20 convention in Amsterdam, Netherlands, this week. “We believe companies like Brex and Ramp still haven’t found strong product market fit for what this potential market is going to be.”

Payhawk is a company spend administration platform that points sensible playing cards for purchasers’ staff to make funds and preserve observe of their bills. Decathlon and Vinted are amongst its prospects.

Within the U.S., Payhawk has partnered with American Specific below the bank card large’s Sync Business Companion Program. This permits it to problem digital playing cards which earn rewards primarily based on person spending.

Payhawk recorded enormous development within the first quarter, the corporate instructed CNBC. It revealed that income climbed 84% globally year-over-year, and gross sales jumped 127% within the U.Ok. — a market that now makes up 27% of general income.

Payhawk’s development got here off the again of a big enhance in purchasers. The agency stated it noticed a 58% enhance in prospects year-over-year within the three months ending March, with the U.Ok., once more, a serious driver.

Now, Payhawk desires to develop its U.S. footprint in a giant means — and M&A can be a key to unlocking that development, in response to Borisov.

“Many businesses that got funded in last two or three years are now in a position where they’re looking at strategic options,” Borisov stated. “This is something we’re actively doing. We’re looking for companies to buy.”

“Our vision is to be able to provide a single platform that provides a homogeneous environment your corporate expense needs with a single provider,” Borisov stated. “There is going to be some market consolidation.”

Requested whether or not his agency was trying to increase new enterprise funding to realize its targets, Borisov stated that Payhawk is at all times in fundraising conversations.

He added that its renewed development over the previous 12 months had garnered curiosity from exterior traders, after a more durable 2022 and early 2023.

“Fundraising is everyday,” he stated. “It’s not because we need money. The worst time to fundraise is when you need the money.”

“We’re speaking to investors daily, understanding where the market is,” Borisov added. “Partners who do believe in that vision see the same way.”

Payhawk might look to lift a brand new enterprise spherical both this 12 months or subsequent 12 months, Borisov added. The agency, backed by enterprise corporations Lightspeed, Greenoaks, and Earlybird, has raised $240 million up to now.

He stated his final objective is for Payhawk to grow to be a publicly listed firm, although there isn’t any date but for the agency to launch a public market debut.

“Our ultimate goal is to IPO the company, this is something we’re focused on,” Borisov stated. “This really depends on the market conditions and market realities.”