Payoneer in advanced talks to enter Nasdaq via SPAC

Yet another Israeli powerhouse is making its way to Nasdaq. Calcalist has learned that fintech company Payoneer is in advanced negotiations to merge with a SPAC company, apparently an American one, at a valuation of $2.5 billion to $3 billion.

Payoneer is currently drafting an S-1 filing to submit to the SEC on the chances that the talks, which are in advanced stages, mature into a deal. In case the deal falls through, Payoneer means to conduct an IPO. Either way, the company aims to go public in the next six months, with the main benefactor being venture capital fund Viola, which is Payoneer’s lead backer.

This is not the first time Payoneer has eyed a Nasdaq issuance. It examined the possibility as early as 2015, but it failed to materialize. In early 2019, the company also held meetings with investment banks with the goal of kickstarting the move, but then too, it failed to advance. Now, in light of the blistering hot IPO market, it was decided they would try again.

Like other fintech companies, Payoneer has benefited from the accelerated digitalization process taking place in large part due to the coronavirus (covid-19) pandemic, with huge clients like Walmart and Amazon increasing their use of its products. The fact that the company continued to recruit new employees even during the height of the crisis is a testament to its ongoing growth. In August, Payoneer began recruiting 150 new employees in Israel and a similar number for its global offices. Before that, the company was employing 1,500 people worldwide, 900 of them in Israel. Payoneer is managed by Scott Galit, who replaced founder Yuval Tal as CEO in 2010, with Tal becoming president. Keren Levy runs the Israeli operations.

Founded in 2005, Payoneer provides online money transfer and digital payment services. Users can pay and receive funds via several methods, including credit cards, debit cards, electronic wallets, and bank transfers. In recent months it has also started to enter the enterprise credit card clearing business. It is currently active in more than 20 countries and has upwards of four million customers.

The company has raised approximately $245 million to date. In its early days, it was backed by prominent local angel investors. They were later joined by venture capital funds, including Viola Ventures, Greylock, TCV, Susquehanna Growth Equity, Wellington Management, Vintage Investment Partners, and China's largest insurer, Ping An Insurance Group.

Merging with SPACs (special purpose acquisition companies) has become a popular way for companies to enter stock exchanges this year. SPAC companies have a limited window, usually of two years to begin activity, if it fails to generate business within that time, the money is returned to investors. Since the beginning of the year, 242 SPAC companies have been listed (more than half of the total listings) having raised an accumulated $81 billion, six times the amount in 2019. Other Israeli companies that are weighing such a move are Taboola and Innoviz Technologies.