Payoneer, a New York City-based fintech start-up that specializes in facilitating cross-border payments, is set to go public by merging with a blank-check company led by Bancorp founder Betsy Cohen, the companies announced Wednesday.
The merger with Cohen’s SPAC, FTAC Olympus Acquisition Corp., values Payoneer at $3.3 billion. The transaction also includes a $300 million private investment in public equity (PIPE) from existing investor Wellington Management, as well as Fidelity Management & Research Company, and Franklin Templeton, among others.
So-called “blank check” companies are formed for the sole purpose of buying another company, and taking it public typically within two years. SPAC offerings have been on a hot streak over the last year as the pandemic and wild volatility continue to weigh on the traditional IPO market. In 2020, the volume of IPOs more than doubled from 2019, with 494 debuts that raised $174 billion — a 150% increase in dollars raised from 2019, according to FactSet. SPAC debuts accounted for half of those, while also representing 56% of all IPOs in Q3 and 52% of all IPOs in Q4.
But Cohen and her team were in on the SPAC trend before 2020’s mania began: FTAC is their fourth fintech-focused shell company. One 2018 SPAC announced a merger agreement late last year with payments provider Paya. Another, which went public in January 2017, combined with International Money Express. FinTech Acquisition, which went public in February 2015 combined with CardConnect, which was later acquired by First Data for roughly $750 million.
Payoneer was started in 2005 by Yuval Tal, an Israeli entrepreneur who helped start other tech and e-commerce payment companies. Scott Galit joined as CEO in 2010 after years at First Data and MasterCard.
“We chose to take Payoneer public via SPAC because it provides us with certainty of financing, more control around timing, and an incredible platform for future growth,” Galit told CNBC. “We’ve known Betsy and her team for a long time, and feel we couldn’t have a better partner. Her expertise in this industry, as well as FTAC’s recognized position as SPAC pioneers bodes well for a successful, long-term partnership.”
Cohen’s acquisition comes during both a boom and reckoning for digital finance. Last week, Robinhood found itself in the center of an uproar after restricting trading on equities amid a frenzy of retail trading and extreme bouts of market volatility. Meanwhile, the virus has accelerated technologies such as contactless payments and online banking and seen some big IPOs in the space, including another CNBC Disruptor 50 company, Affirm. Online financial services company, SoFi, which was No. 8 on the 2020 CNBC Disruptor 50 list, is set to go public by merging with a blank-check company run by venture capital investor Chamath Palihapitiya.
Payoneer ranked to both the 2017 and 2018 CNBC Disruptor 50 lists.
Nominations are open for the 2021 CNBC Disruptor 50, a list of private start-ups using breakthrough technology to become the next generation of great public companies. Submit by Friday, Feb. 12, at 3 pm EST.