Payhawk, the Corporate Card Unicorn, Plans Acquisitions for US Expansion

In AMSTERDAM, Netherlands, corporate payments startup Payhawk revealed to CNBC its plans for mergers and acquisitions to expand its presence in the corporate spend management sector and compete with major companies such as SAP.

The startup aims to acquire a company or companies at the series A funding stage, referring to early-stage startups that have already secured significant funding.

In a conversation with CNBC, Hristo Borisov, CEO and co-founder of Payhawk, expressed his belief that his company has a superior “product-market fit” compared to its competitors, who have achieved multibillion-dollar valuations by offering free corporate cards to other startups.

“We see an opportunity for much better unit economics in this business,” Borisov stated in an interview with CNBC at the Money 20/20 conference in Amsterdam, Netherlands, this week. “We think companies like Brex and Ramp have yet to find a strong product-market fit for what this potential market will be.”

Payhawk is a corporate spend management platform that issues smart cards to clients’ employees for payments and expense tracking. Its clientele includes Decathlon and Vinted.

Payhawk achieved significant growth in the first quarter, as reported to CNBC. It disclosed a global year-over-year revenue growth of 86%, and sales in the U.K. increased by 127%, accounting for 27% of total revenue.

The company’s growth was driven by a substantial increase in clients, with a year-over-year customer increase of 58% in the quarter ending in March, primarily driven by the U.K. market.

Payhawk now aims to build on this growth, with mergers and acquisitions being a primary strategy for unlocking future opportunities, according to Borisov.

“Many companies that received funding in the past two or three years are now considering strategic options,” Borisov said. “This is something we are actively doing. We’re looking for companies to acquire.”

“Our goal is to provide a single platform that caters to all your corporate expense needs with a single provider,” Borisov stated. “There is going to be some market consolidation.”

Payhawk does not plan to acquire companies in the U.S. market, Borisov mentioned, adding that Payhawk is partnered with American Express under the credit card giant’s Sync Commercial Partner Program in the U.S.

When asked whether Payhawk plans to raise new venture funding to achieve its goals, Borisov stated that the company is always in fundraising discussions.

He mentioned that the company’s growth over the past year has attracted interest from external investors, despite a challenging 2022 and early 2023.

“Fundraising is an ongoing process,” he stated. “It’s not because we need money. The worst time to fundraise is when you need the money.”

“We’re speaking to investors daily to understand the market,” Borisov added. “Partners who believe in our vision see things the same way.”

Payhawk may consider raising a new venture round either this year or next, according to Borisov. The company, backed by venture firms Lightspeed, Greenoaks, and Earlybird, has raised $240 million so far.

Borisov stated that his ultimate goal is for Payhawk to become a publicly-listed company, though no date has been set for the company’s debut on the public market.

“Our primary aim is to take the company public, and this is our current focus,” Borisov stated. “This will depend on market conditions and realities.”