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Payhawk Plans M&A Spree After Huge Growth

Payhawk, corporate card startup valued at $1 billion, with a major acquisition spree and impressive 86% surge in sales
June 7, 2024

Corporate payments startup Payhawk has set its sights on mergers and acquisitions as a key strategy to expand its presence 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 Series A funding.

Hristo Borisov, Payhawk’s CEO and co-founder, highlighted the company's superior "product-market fit" compared to competitors who have achieved multibillion-dollar valuations by offering free corporate cards to startups. "We see an opportunity to have much better unit economics in this business," Borisov remarked at the Money 20/20 conference in Amsterdam. He pointed out that firms like Brex and Ramp have yet to secure a robust product-market fit for their target market.

Payhawk offers a corporate spend management platform that provides smart cards for employee payments and expense tracking. With clients like Decathlon and Vinted, the startup has seen impressive growth. The first quarter of this year saw Payhawk's global revenue surge by 86% year-over-year, with a 127% sales increase in the U.K., now accounting for 27% of its total revenue. The company also reported a 58% rise in its customer base over the same period, driven significantly by the U.K. market.

Borisov emphasized that mergers and acquisitions are crucial for sustaining this growth momentum. “Many businesses that received funding in the past two or three years are now exploring strategic options,” he said. “We’re actively seeking companies to acquire.” Payhawk aims to offer a comprehensive platform that meets all corporate expense needs, envisioning a market consolidation where one provider offers a seamless experience.

Interestingly, Payhawk is not eyeing acquisitions in the U.S. market. Instead, it has partnered with American Express through the credit card giant's Sync Commercial Partner Program to serve U.S. clients. 

When asked about future funding, Borisov confirmed that Payhawk is continuously engaged in fundraising discussions, primarily to stay attuned to market conditions rather than out of necessity. “Fundraising is everyday,” he explained. “The worst time to fundraise is when you need the money.” He hinted that a new venture round could be raised either this year or next, having already attracted $240 million in funding from prominent venture firms such as Lightspeed, Greenoaks, and Earlybird.

Ultimately, Payhawk’s goal is to go public, although the timing of an IPO will depend on favorable market conditions. “Our ultimate goal is to IPO the company, and this is something we’re focused on,” Borisov stated, underscoring the company’s long-term vision and commitment to becoming a publicly listed entity.

With an aggressive growth strategy and a keen eye on strategic acquisitions, Payhawk is poised to make significant strides in the corporate spend management arena, challenging established players and carving out a substantial market share.

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