Payoneer, a New York-based fintech start-up specializing in facilitating international payments, is expected to go public by merging with a blank check company led by Bancorp founder Betsy Cohen, the companies announced on Wednesday.
The merger with Cohen’s SPAC, FTAC Olympus Acquisition Corp., values Payoneer at $ 3.3 billion. The transaction also includes a private investment of $ 300 million in public shares (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 making it public in two years. SPAC’s offerings have been at a high ebb in the past year, as the pandemic and wild volatility continue to weigh on the traditional IPO market. In 2020, the volume of IPOs more than doubled compared to 2019, with 494 premieres that raised $ 174 billion – an increase of 150% in dollars raised from 2019, according to FactSet. SPAC premieres accounted for half of them, while representing 56% of all IPOs in the third quarter and 52% of all IPOs in the fourth quarter.
But Cohen and his team followed the SPAC trend before the 2020 craze started: FTAC is the fourth front company to focus on fintech. A 2018 SPAC announced a merger agreement at the end of last year with payment 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 around $ 750 million.
Payoneer was founded in 2005 by Yuval Tal, an Israeli businessman who helped start other technology and e-commerce payment companies. Scott Galit joined as CEO in 2010, after years at First Data and MasterCard.
“We chose to go public with Payoneer via SPAC because it gives us certainty of funding, more control over time and an incredible platform for future growth,” Galit told CNBC. “We have known Betsy and his team for a long time and we felt that we could not have a better partner. His experience in this sector, as well as FTAC’s recognized position as a pioneer of SPAC, bodes well for a successful and long-term partnership. “
Cohen’s acquisition comes during a boom and reckoning for digital finance. Last week, Robinhood found himself in the middle of an uproar after restricting stock trading amid a frenzy of retail trading and extreme attacks of market volatility. Meanwhile, the virus has sped up technologies like contactless payments and online banking and has seen some major IPOs in space, including another CNBC Disruptor 50 company, Affirm. SoFi, an online financial services company, which ranked 8th on the 2020 CNBC Disruptor 50 list, is expected to go public by merging with a blank check company run by venture capitalist Chamath Palihapitiya.
Payoneer was ranked on the CNBC Disruptor 50 lists of 2017 and 2018.
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