Payoneer Acquires Skuad, Expands Global HR Services
Payoneer Acquires HR and Payroll Startup Skuad for $61 Million in Strategic Fintech Move
Payoneer, a significant player in New York, has just made a bold move by acquiring Skuad, a smaller HR and payroll startup from Singapore, for a whopping $61 million. In addition to this initial amount, there's potential for an extra $10 million payout if Skuad meets set targets over the next 18 months. Payoneer also sweetened the deal with $10 million in stock for key Skuad personnel, pushing the total potential value of the acquisition to $81 million.
Skuad, founded by Sundeep Sahi in 2019, provides support to small and medium businesses in over 160 countries, helping them navigate complex international HR matters. Prior to this sale, the startup had managed to secure approximately $19 million from investors, indicating a solid foundation.
On the other hand, Payoneer, with its extensive reach spanning over 190 countries, specializes in facilitating cross-border payments for businesses. Notably, the company has steered its focus towards catering to the needs of small and medium enterprises, distinguishing itself from larger payroll corporations. With a workforce exceeding 2,150 employees, Payoneer recently announced a record-breaking revenue of $240 million in the last quarter, reaffirming its strong performance in the industry.
This acquisition aligns with the broader trend in the fintech sector, where numerous startups are merging due to a slowdown in venture capital funding. Payoneer has been notably proactive in this landscape, having previously acquired an AI data startup and a payments company operating in China.
Key Takeaways
- Payoneer secures Skuad for $61 million, with the potential of an additional $10 million based on performance, reaching a total of $81 million.
- Skuad, established in 2019, facilitates international hiring and payroll processes for small and medium businesses in over 160 countries.
- Payoneer aims to amalgamate Skuad's payroll and contract management offerings into its existing range of services.
- Payoneer achieves a significant uptick in Q2 revenue totaling $240 million, marking a 16% year-over-year increase, with adjusted EBITDA standing at $73 million.
- This acquisition is in line with Payoneer's strategic vision to capture a larger portion of the $6 trillion B2B market.
Analysis
Payoneer's acquisition of Skuad is a calculated move to enhance its global payroll capabilities, specifically targeting the burgeoning remote work sector within the expansive $6 trillion B2B market. This strategic shift underscores the company's proactive approach in the face of a slowdown in VC funding, leveraging acquisitions to broaden its service portfolio. While this deal stands to benefit Skuad's investors, it may strain Payoneer's near-term financials. However, successful integration in the long run could fortify Payoneer's competitive stance against larger payroll giants, fostering revenue growth and an expanded market share.
Did You Know?
- Payoneer's Acquisition Strategy: Payoneer's recent purchase of Skuad, combined with other strategic acquisitions such as an AI data startup and a payments company operating in China, signifies an intentional move to diversify and strengthen its offerings. This strategy is particularly notable in the current climate of VC funding deceleration, signifying a shift towards consolidation and growth through acquisitions, rather than solely relying on external funding.
- Skuad's Impact in International HR: Skuad specializes in streamlining international hiring and payroll processes for small and medium-sized businesses (SMBs) across more than 160 countries. This capability holds immense significance in today's globalized economy, where companies often contend with managing a diverse workforce spread across different jurisdictions, each with its own set of regulatory and compliance requirements. Skuad's technology likely offers a streamlined approach to these complex processes, easing the burden for SMBs expanding and overseeing their international operations.
- Remote Work's Influence on B2B Markets: The surge of remote work has profoundly altered the dynamics of B2B markets, particularly in sectors like HR and payroll services. With more businesses embracing virtual operations, the demand for efficient and compliant international HR solutions has surged. John Caplan, CEO of Payoneer, recognizes this trend as a substantial opportunity within the $6 trillion B2B market, indicating that companies like Payoneer and Skuad are well-positioned to capitalize on the growing need for solutions tailored to managing remote workforces.