Cross-border payments fintech Payoneer to IPO with $3.3bn Spac merger
Payoneer, a New York-founded cross-border payments platform, has signed a $3.3 billion deal with blank check company FTAC Olympus Acquisition Corp to go public.
FTAC is a special purpose acquisition company (Spac) headed up by The Bancorp founder, Betsy Cohen. It will use its investor cash to buy Payoneer in a reverse-merger.
Alongside Temasek, Susquehanna Growth Equity (SGE), Viola Ventures, Nyca Partners and Wellington Management, the fintech’s investors also include TCV – the lead backer of Revolut’s half a billion-funding round.
Payoneer is reportedly profitable and expects to pull in $432 million in revenues this year. The company processed more than $44 billion in payments last year.
Set to go public before the end of the first half of 2021, Payoneer enters the year with an impressive network consisting of 7,000 trade corridors.
Following the deal, which broke on 3 February, FTAC’s share price shot up from $12.79 to highs of $14.40.
Payoneer’s investor Wellington Management – as well as Dragoneer Investment Group, Fidelity Management, Franklin Templeton, and a host of Millennium Management funds – have committed a collective $300 million of private investment in public equity (Pipe) as part of the $3.3 billion deal.
The Spac route has, in recent months, become the new and favoured route to an initial public offering (IPO) – at least in the US.
In 2020, some 445 total IPOs took place in the US. Roughly half, or 248, were Spacs that returned on average more than 5%. Comparatively, there were 213 IPOs in 2019, but just 59 of them were Spacs.
Who is Payoneer?
Founded 15 years ago in 2005, Payoneer has since built a hefty ecosystem. It allows buyers, sellers, banks and to send payments between borders.
Its multi-currency account, designed for businesses of “any size”, supposedly simplifies international payments. Injecting them with the ease of domestic payment solutions.
Today, its solutions also cover marketplace payments, accounts payable and receivable, merchant services, working capital and risk.
Cohen says Payoneer’s ability “to facilitate the overall growth of e-commerce” is a big draw for the Spac.
She cites the fintech’s capabilities in business-to-business (B2B) payment digitalisation, global risk and compliance infrastructure, and small business-friendly environment as reasons for this.