Payoneer goes public via $3.3 billion SPAC route

• The deal values Payoneer at $3.3 billion or 7.6 times of the expected revenue of $432 million in 2021.
• FTAC Olympus is noted for its deep expertise in fintech and financial services.
• The reorganised company will have $563 million in cash and the injection of capital will give Payoneer more flexibility and resources to power growth of global business.

Payoneer, a global payment and commerce-enabling platform, announced in early February 2021 that it has reached a final agreement with FTAC Olympus Acquisition Corp, a special purpose acquisition company (SPAC), to initiate a plan of reorganisation.

The merged entity is valued at $3.3 billion

The merged entity is valued at $3.3 billion which is 7.6 times larger than Payoneer’s expected revenue of $432 million in 2021. The reorganised holding company will be renamed Payoneer Global Inc. and will operate as Payoneer, a publicly listed entity in the United States. The reorganisation is expected to close in the first half of 2021.

Scott Galit, chief executive officer of Payoneer, said, "We had a 140% volume increase in 2020 but this is a market worth trillions of dollars so we're still just scratching the surface”. As e-commerce transactions are expanding and consumers are transferring offline shopping demands to online due to the  pandemic, Payoneer processed more than $44 billion in volume in over 7,000 trade corridors in 2020. According to Payoneer's financial statement, the company's revenues in 2020 and 2021 are projected to reach $346 million and $432 million with a growth rate of 8.8% and 24.9%, respectively. However, the company still needs to watch its operating loss which could further worsen in 2021 with $50 million, compared to $18 million in 2020.

Deep expertise in fintech and financial services

The reason for Payoneer to choose a SPAC route was its partner for the merger. Galit said, "We thought more actively about it last year but we had to wait because of the pandemic. We're fortunate to have multiple options available not just of ways to go public but also with whom we went public and Betsy and her team stood out”. "Betsy Cohen and the rest of the FTAC Olympus team have deep expertise in the fintech and financial services sectors and are leaders and pioneers in the recent evolution and re-emergence of the SPAC market,” Galit added.

Betsy Cohen, chairman of FTAC Olympus Acquisition Corp., said, “Innovative and unique high-tech platform positions Payoneer at the epicentre of some of the most powerful and enduring trends driving global commerce today. Its proven ability to facilitate the overall growth of e-commerce through capabilities such as business-to-business (B2B) payment digitisation, global risk and compliance infrastructure, and the enablement of small and medium-sized businesses (SMBs) to rapidly grow and scale sets Payoneer apart. I couldn’t be more excited about this transaction".

Payoneer gains flexibility and resources to grow its global business

The planned listing would provide Payoneer with the advantages of becoming a public company in a relatively short time. Nagesh Devata, regional vice president and head of enterprise APAC, pointed out, “Becoming a publicly traded company is the next logical step to support our growth. This new source of capital will provide greater financial flexibility, in addition to the necessary scale and resources needed to achieve our mission of driving growth for digital businesses of all sizes from all over the world”. Although a SPAC, Payoneer can benefit from choosing investors in an early stage compared to traditional initial public offerings (IPOs). The transaction includes private investment in public equity (PIPE) for institutional investors that can be shared with future financial forecasts with businesses which is prohibited in traditional IPOs.

The reorganised company is said to have $563 million in cash and is expected to grow Payoneer’s global payment business. As Devata explained, “The proceeds will be used to accelerate and grow our global payment and commerce-enabling platform, powering growth for millions of digital businesses. We will be able to invest more in development and expand solutions like our working capital products and merchant services”.

Founded in 2005 in New York, Payoneer is among the first batch of players that made its mark in cross-border payments. The company has established a global financial technology payment platform covering more than 150 currencies and now has 21 branches worldwide with clearing networks in more than 100 countries. The company has four million global core users with benchmark customers such as Amazon, Airbnb, Facebook, Google, other well-known digital giants, cross-border business enterprises and individuals.