ConnexPay, a payment technology provider focused on the travel industry, would sell to the right buyer at the right price, CEO Robert Kaufman said.
The Atlanta-based firm has fielded a couple of strategic buyout offers, but the deals did not offer the price or partner to make it happen, he said.
ConnexPay grew revenue last year 5x compared to 2021 and will remain profitable in 2023 despite doubling expenses, said Kaufman, who declined to disclose more detailed financials.
The company can accept payments for merchants and enable merchant payments to vendors with virtual, one-time use cards — on a single platform. It services more than 100 clients processing more than USD 10bn annually, the CEO said.
Kaufman, who founded the company in 2017, said he would not be interested in taking ConnexPay public or building a company “for my kids to run,” instead preferring to combine with another company.
He has no preferred benchmark or timeline, and a combination could happen “in a month, or it could be in 10 years,” Kaufman said.
An ideal partner or majority investor would be a bank, payment processor, acquirer or card issuer, Kaufman said.
“Somebody that does half of what we do could get into the other half in a strategic, seamless way,” he said.
Competitors include Block [NYSE:SQ], Stripe, Elavon, FIS’s [NYSE:FIS] Worldpay and Braintree in payment processing as well as WEX [NYSE:WEX], Marqeta [NASDAQ:MQ] and Comdata for issuing virtual cards, according to Kaufman. Marqeta led ConnexPay’s USD 20m Series B announced in December 2021. Kaufman believes ConnexPay is unique in its platform that combines the two functions.
Other fintech companies or private equity would also be logical acquirers, the CEO said.
If ConnexPay goes public, it would almost certainly not be with him leading it because he does not like the inflexibility and near-sighted decision-making he believes public scrutiny forces onto companies, Kaufman said.
It has 70 employees.
Acquisition for international expansion
ConnexPay, which has not acquired previously, will make opportunistic buys for companies that can help it expand to new verticals or help with its overseas expansion, Kaufman said. While most of its business is with travel vendors, the company believes it can expand services in e-commerce, ticket brokers, insurance agencies and other models that regularly handle incoming and outgoing payments for related transactions, Kaufman said.
A company that could facilitate overseas growth or that has a significant presence in a non-travel vertical could be attractive, he said. A firm with money licensing in the UK or the European Union would also be enticing to buy, the CEO said.
The firm, which recently began expanding organically outside the US, intends to begin its international growth in the UK and Ireland, the latter of which would give it a foothold in the European Union, Kaufman said.
Backing from FTV Capital provides ConnexPay the capital to acquire targets well north of USD 50m, Kaufman said. The company last October announced a USD 110m Series C led by FTV. No investor owns a majority stake, he noted.
D.A. Davidson represented ConnexPay on the raise.
CliftonLarsonAllen provides accounting services. ConnexPay banks with Central Bank in St. Louis and MVB Bank.
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