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Payhawk, a $1 billion corporate card startup, plans mergers and acquisitions to expand its U.S. footprint – NBC New York

  • Bulgaria-founded corporate card startup Payhawk said it is focusing on acquisitions to help grow its footprint in the US
  • Payhawk’s acquisition drive comes after significant growth for the fintech company, which said it saw an 84% increase in revenue in the first quarter.
  • Hristo Borisov, CEO of Payhawk, said his company can offer a better alternative to popular American companies such as Brex and Ramp.

AMSTERDAM, Netherlands – Business payments startup Payhawk told CNBC it is planning mergers and acquisitions to expand its footprint in the U.S. and compete with major players in the space such as SAP and venture-backed companies Brex and Ramp.

The startup said it is looking to acquire a U.S. company or companies in the Series A stage of their development, referring to early-stage startups that have already raised a significant round of funding.

In an interview with CNBC, Hristo Borisov, CEO and co-founder of Payhawk, said he thinks his company has a better “product-market fit” than its rivals, who have achieved billion-dollar valuations by handing out free corporate cards to other startups . .

“We see an opportunity to have much better unit economics in this industry,” Borisov told CNBC this week at the Money 20/20 conference in Amsterdam, Netherlands. “We believe companies like Brex and Ramp still have not found a strong product market fit for what this potential market will be.”

Payhawk is a business expense management platform that issues smart cards to customers’ employees to make payments and track their expenses. Decathlon and Vinted are among his customers.

In the US, Payhawk has partnered with American Express under the credit card giant’s Sync Commercial Partner Program. This allows it to issue virtual cards that earn rewards based on user spending.

Consolidation of the name of the game

Payhawk posted tremendous growth in the first quarter, the company told CNBC. It showed that sales increased by 84% year-on-year globally, and sales in the UK increased by 127% – a market that now accounts for 27% of total sales.

Payhawk’s growth was driven by a significant increase in the number of customers. The company said it saw a 58% increase in customers year-on-year in the three months ending in March, with Britain once again a key driver.

Now Payhawk is looking to expand its U.S. footprint in a big way — and Borisov says mergers and acquisitions will be a key to unlocking that growth.

“Many companies that have received financing in the past two or three years are now in a position where they are looking at strategic options,” Borisov said. “This is something we are actively working on. We are looking for companies to buy.”

“Our vision is to be able to provide a single platform that provides a homogeneous environment that your business spend needs, from a single provider,” said Borisov. “There will be some market consolidation.”

Aim to become a publicly traded company

When asked if his company was looking for new venture capital funding to achieve its goals, Borisov said Payhawk is always in discussions about fundraising.

He added that renewed growth over the past year had attracted interest from outside investors, after a tougher 2022 and early 2023.

“Fundraising is every day,” he said. “It’s not because we need money. The worst time to raise money is when you need the money.”

“We speak to investors every day and understand where the market is,” Borisov added. “Partners who believe in that vision see the same thing.”

Payhawk could launch a new venture round 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, although there is no date yet for when the company will debut on the public market.

“Our ultimate goal is to take the company public, this is something we are focusing on,” Borisov said. “It really depends on market conditions and market realities.”

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