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AMSTERDAM — Corporate payments startup Payhawk told CNBC that it is planning mergers and acquisitions to grow its footprint in the world of corporate spend management and take on big players like The juicer.
Payhawk said it is looking to acquire a company or companies in the A stage of its development, referring to early-stage startups that have already raised a large round of funding.
In an interview with CNBC, Hristo Borissov, co-founder and CEO of Payhawk, said he believes his company has a better “product-market fit” than its competitors, which have earned billion-dollar valuations by handing out free corporate cards to other startups. .
“We see an opportunity to get much better unit economics in this business,” Borissov told CNBC at the Money 20/20 conference in Amsterdam this week. “We believe that companies like Brex and Ramp have not yet found a strong product market that matches what this potential market will be.”
Payhawk is a corporate spend management platform that issues smart cards to clients' employees to make payments and track their expenses. Decathlon and Vinted are among its clients.
Standardize the name of the game
Payhawk recorded tremendous growth in the first quarter, the company told CNBC. It revealed that revenues rose 86% globally year-on-year, and sales jumped 127% in the UK – a market that now makes up 27% of total revenues.
Payhawk's growth came on the back of a significant increase in the number of customers. The company said it saw a 58% rise in customers year-on-year in the three months to March, with the UK once again a key driver.
Now, BayHawk wants to build on that growth — with key mergers and acquisitions to unlock future opportunities, according to Borisov.
“Many companies that received financing in the last two or three years are now in a position to look for strategic options,” Borisov said. “This is something we are actively doing. We are looking for companies to buy.”
“Our vision is to be able to provide a single platform that provides the harmonized environment your company’s expenses need with one provider,” he said. “There will be some consolidation in the market.”
He said that Borisov is not looking for companies in the US market to acquire, adding that in the US, Payhawk has partnered with American Express Under the credit card giant's Sync Commercial Partner program.
The goal is to become a public company
Asked if his company was looking to raise new funding for the project to achieve its goals, Borisov said that Payhawk is always in fundraising talks.
He added that its renewed growth over the past year has attracted the attention of external investors, after a more difficult 2022 and early 2023.
“Fundraising is a daily thing,” he said. “Not because we need the money. The worst time to fundraise is when you need the money.”
“We talk with investors every day and understand where the market is,” Borisov added. “Partners who believe in this vision see it the same way.”
Borisov added that Payhawk may look to raise a new venture round either this year or next. The company, backed by venture 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 set date yet for the company's public market debut.
“Our ultimate goal is to go public, and that is something we are focusing on,” Borisov said. “It really depends on market conditions and market realities.”
