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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 take on big players like SAP.
Bulgarian company Payhawk said it is looking to acquire one or more companies at the Series A stage of their development, referring to early-stage startups that have already raised a significant funding round.
In an interview with CNBC, Hristo Borisov, Payhawk’s co-founder and CEO, said he believes his company has better “product-market fit” than its competitors, which have earned multibillion-dollar valuations by handing out free corporate cards to other startups.
“We see an opportunity to significantly improve the profitability of this business,” Borisov told CNBC at the Money 20/20 conference in Amsterdam this week. “We think companies like Brex and Ramp have not yet found a product fit for what this addressable market will be.”
Payhawk is a corporate expense management platform that issues smart cards that allow its clients’ employees to make payments and track their spending. Its clients include Decathlon and Vinted.
Consolidation is the name of the game
Payhawk reported huge growth in the first quarter, the company told CNBC. It revealed that revenue grew 86% globally year-over-year and sales jumped 127% in the U.K., a market that now accounts for 27% of global revenue.
Payhawk’s growth has been driven by a significant increase in customer numbers. The company said it saw a 58% increase in customer numbers year-on-year in the three months to March, with the UK once again being a key driver of this growth.
Payhawk now wants to capitalise on this growth, with mergers and acquisitions being key to unlocking future opportunities, according to Borisov.
“Many companies that have received funding in the last two or three years are now in a position to look at strategic options,” Borisov said. “This is something we are actively doing. We are looking for companies to buy.”
“Our goal is to be able to offer a single platform that provides a consistent environment to meet your business spending needs from a single vendor,” he said. “There’s going to be some consolidation in the market.”
Borisov is not looking for companies to acquire in the American market, he said, adding that in the United States, Payhawk is partnering with American Express as part of the credit card giant’s Sync business partner program.
Objective of becoming a public company
Asked whether his company was looking to raise new funds to achieve its goals, Borisov said Payhawk was still in fundraising talks.
He added that its renewed growth over the past year had attracted interest from external investors, after a more difficult 2022 and early 2023.
“Fundraising is a daily occurrence,” he said. “It’s not because we need the money. The worst time to raise money is when you need it.”
“We talk to investors every day to understand where the market is,” Borisov added. “Partners who believe in this vision see the same thing.”
Payhawk could look to raise new funding this year or next, Borisov added. The company, 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 publicly traded company, though there is no date yet for the company to launch its public market debut.
“Our ultimate goal is to list the company on the stock exchange, this is something we are focused on,” Borisov said. “It really depends on market conditions and realities.”
