Dive Brief:

• E-commerce payments company Payoneer is “intently focused” on merger and acquisition opportunities as private company valuations decline, CFO Bea Ordonez said Tuesday.
• The company is considering product-driven acquisition opportunities that will help fuel revenue growth “and grow the moat around our emerging markets infrastructure,” CEO John Caplan told analysts Tuesday during the company’s first-quarter earnings conference call. “We believe M&A will play a meaningful role in our growth strategy and are actively evaluating opportunities.”
• New York City-based Payoneer is assessing acquisition targets “through the lens of product extensions where we can leverage our existing reach and customer base,” Caplan said. The company is also considering acquisitions that would help Payoneer deepen its regional footprint in high-growth markets such as Latin America, or extend its existing licensing framework and infrastructure, Caplan added.

Dive Insight:

Payoneer’s first-quarter net income dropped 61%, to $7.9 million, as revenue rose 40%, to $192 million, according to an earnings press release. The company provides payments services for cross-border sellers and marketplaces.

As private market valuations finally begin to decline, accelerated in part by the collapse of Silicon Valley Bank, Payoneer has “seen an uptick in inbound opportunity” on the acquisition targets front, Ordonez said. 

Payoneer aims to bolster accounts receivable, accounts payable and lending solutions, Caplan said, and is working to build and/or buy to do so. “Over the coming five years, this product-led growth, and product-led M&A will be a really important dynamic of the expansion of the Payoneer franchise,” Caplan said. 

He wouldn’t name specific companies or products Payoneer is eyeing, but added, “we are active on all fronts.” Earlier this year, William Blair analysts identified Payoneer as a potential acquisition target itself. 

Ordonez also noted the company’s hiring pause, and said restricting hiring across the company is expected to save $5 million this year. As Payoneer considers “further headcount efficiencies,” the company aims to reduce redundant roles, she said.

“We expect to exit the year with headcount modestly lower versus the prior year,” Ordonez said. The company had 2,336 employees across 36 countries as of December 2022, according to its most recent annual filing with the Securities and Exchange Commission.