Payoneer Acquires Global Payroll Startup Skuad for $61 Million in Cash, Bolstering Fintech Offerings

In a significant move within the fintech world, Payoneer, headquartered in New York, has announced the acquisition of the Singapore-based HR and payroll startup Skuad. The deal was closed for $61 million in cash, as reported exclusively to TechCrunch.

Additionally, Payoneer may shell out up to $10 million more based on Skuad achieving certain milestones within the first 18 months post-acquisition. Furthermore, Payoneer has pledged to award $10 million in restricted stock units, with the caveat that these are dependent on the continued involvement of Skuad’s key staff members, potentially elevating the total payout to approximately $81 million.

Sundeep Sahi, who initiated Skuad in 2019 with the vision of streamlining global hiring, has experienced a relatively swift journey to this point. Skuad’s mission focused on aiding small and medium-sized businesses across 160 countries (supporting over 100 currencies) navigate the complexities of international employment, such as dealing with varying regulatory landscapes, managing international payroll, and facilitating remote onboarding.

Before its acquisition, Skuad had successfully raised around $19 million from venture capitalists like Beenext, Anthemis, NMVM, Argor Capital, along with several individual investors.

Payoneer, known for its cross-border payment services, serves around 2 million businesses across more than 190 countries and territories.

Both companies share a focus on serving SMBs operating on a global scale, particularly in emerging economies. This is in contrast to other payroll management companies like Deel and Rippling, which tend to cater to larger enterprises, according to Payoneer CEO John Caplan.

With over 2,150 employees, Payoneer is significantly larger than Skuad, which has around 200 employees. Caplan confirmed all Skuad employees are set to join Payoneer following the acquisition. While exact financial figures for Skuad were not disclosed, it was noted for its robust and growing revenue model. Moreover, Payoneer recently reported a record revenue of $240 million and an adjusted EBITDA of $73 million for the second quarter, marking a 16% increase year-over-year.

Caplan emphasizes the enduring nature of remote work and the consequent pressures companies face in cutting labor costs. He sees Payoneer’s acquisition of Skuad as a strategic move to offer more scalable solutions beyond the freelancer model, aligning with the trend of remote work permanence post-pandemic.

Plans are in place to merge Skuad’s payroll and contract management capabilities into Payoneer’s offerings.

The fintech sector’s pace of acquisitions has seen a notable increase amid a venture capital slow down, with 159 transactions either announced or completed by mid-April 2024, keeping pace with the previous year’s figures as cited by Capstone Partners.

Following its 2021 SPAC merger, publicly traded Payoneer has been assertive in its acquisitions, including the recent announcement of purchasing AI data startup Spott and another payment company with licenses in China, in addition to a 2019 acquisition of a German payments company, optile.

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