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AMSTERDAM — Corporate payments startup Payhawk told CNBC it is planning mergers and acquisitions to grow its presence in the world of corporate spend management and take on larger players like: Financial Statements.
Payhawk said it is considering acquiring one or more companies in the Series A stage, a term referring to early-stage startups that have already raised significant amounts of funding.
Payhawk co-founder and CEO Hristo Borisov said in an interview with CNBC that he believes his company has better “product-market fit” than rivals that have garnered multi-billion dollar valuations by giving out free corporate cards to other startups.
“We think there’s an opportunity in this business to get much better unit economics,” Borisov told CNBC at the Money 20/20 conference in Amsterdam this week. “We think companies like Brex and Lamp haven’t yet found a strong product-market fit for what this potential market is.”
Payhawk is an enterprise spend management platform that issues smart cards to its clients’ employees so they can make payments and track expenses. Customers include Decathlon and Vinted.
Integration is the goal of the game
Payhawk told CNBC that it saw strong growth in the first quarter. The company revealed that its revenue grew 86% year-over-year worldwide, with sales in the UK growing 127%. The UK market now accounts for 27% of its total revenue.
Payhawk’s growth is driven by strong customer growth: the company said it saw a 58% year-over-year increase in customer numbers in the three months to March, with the UK again being a major driver.
Payhawk now wants to further its growth, with mergers and acquisitions being key to unlocking future opportunities, according to Borisov.
“Many of the companies that we’ve funded in the last couple of years are now in a position where they’re considering strategic options,” Borisov said. “This is something we’re actively doing. We’re looking for companies to acquire.”
“Our vision is to provide a single platform that gives businesses a uniform environment for expense management with a single provider,” he said. “You’re going to see more consolidation in the market.”
Borisov said he is not looking for a company to acquire in the U.S. market, where Payhawk is American Express We are a participant of the major credit card company, Sync Commercial Partner Program.
Aiming to become a listed company
When asked if the company was considering raising new venture capital to further its objectives, Borisov said Payhawk is constantly in fundraising discussions.
He added that after a tough period in 2022 and early 2023, renewed growth over the past year has attracted interest from outside investors.
“Fundraising is happening every day,” he said. “We’re not fundraising because we need money. The worst time to fundraise is when you need money.”
“We talk to investors every day and keep abreast of the market conditions,” Borisov added. “And we have partners who believe in the vision and share that same view.”
Payhawk, backed by venture firms Lightspeed, GreenOaks and EarlyBird, has raised $240 million to date and may consider raising new funds this year or next, Borisov added.
He said the ultimate goal is for Payhawk to become a publicly traded company, but a date for the IPO has not yet been set.
“Our ultimate goal is an IPO of the company, and we are focused on this,” Borisov said. “This depends a lot on market conditions and realities.”
