Betsy Cohen, Payoneer CEO discuss $3.3B SPAC

Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi speak with FTAC Chairman of the Board Betsy Cohen and Payoneer CEO Scott Galit about their SPAC deal and the future of fintech.

Video Transcript


JULIE HYMAN: Well, let's talk about a SPAC deal that was announced last week and will close sometime soon. FTAC, F-T-A-C Olympus Acquisition Corp. is taking Payoneer public for an enterprise value of $3.3 billion. Payoneer provides payment and business services to businesses. And joining us now to talk about this is Scott Galit. He is the Payoneer CEO, as well as Betsy Cohen, FTAC Chairman of the Board. Thank you both so much for joining us.

Scott, I do want to start with you and talk about Payoneer's business model here. So you sit in the fintech space and you provide services exclusively to businesses in terms of payment flow. And to help us sort of understand where you sit, who would you say is your closest competitor? Is it a Square? Is it more the big credit card companies? Talk to us about where you fit in.

SCOTT GALIT: Yeah, and thanks so much for having us on today. There really isn't any other company that's just like Payoneer. We've really built a pretty unique global platform. And we connect an entire ecosystem of digital businesses together on a single global infrastructure that makes doing business globally as easy as it is to do locally. So we work with marketplaces and platforms, for example, think of household name companies that folks might be aware of, companies along the lines of Airbnb or Upwork or Amazon.

And then we also work with small businesses that come from over 190 countries all over the world. So there are a couple of really unique attributes to what we do, how global we are, the fact that we have these two-sided networks that we've put on our platform. And really actually facilitating both payments and commerce for our customers all over the world.

BRIAN SOZZI: Betsy, this is your fourth fintech-focused SPAC, if I'm correct. What's attracting you to the space?

BETSY COHEN: The SPAC is particularly good for growth companies like Payoneer. And there are today a number of growth companies. These are companies that were begun maybe in 2008 to 2012 when the adoption by consumers of internet purchases and e-commerce was at a much lower level than it is today. It's also a time when CEOs, forward-looking CEOs like Scott, are interested in moving the process along. And that's what a SPAC does. A SPAC allows growth companies to communicate their growth on a forward basis to prospective investors.

MYLES UDLAND: Scott, when you think about everything that's happening in the payment space right now, and I'm sure you get a version of this question all the time, but what inning maybe is it in as far as you see it? Especially on the B2B side where you guys are mostly focused.

SCOTT GALIT: We think it's super early days, really because there are two big forces that are at work here. First is, we think we're still very early days in the digitalization of commerce all over the world. And COVID has certainly contributed to accelerating this, but this is really a multi-decade process where really all commerce in all places all over the world is becoming more digital.

And so that is really the backdrop for why Payoneer exists, because as business becomes digital, there's a need for new tools, new services and new business models to help these newly digital businesses actually do more business in more places and make it easier. And then along with that, there's still tens of trillions of dollars that move around the world every year through wires and the same kind of legacy infrastructure that's been used for so long.

So kind of in parallel with the digitalization of commerce is a need to kind of rebuild and rethink the financial infrastructure and the financial services that businesses are using to do business all over the world. So we think we're still really early days. And that's why we're so excited about this opportunity to partner with Betsy and her team, move to the public markets, have access to more capital, and be able to put the foot on the gas for growth. So we think we're again, very early days in this whole process.

JULIE HYMAN: And Betsy, if I can ask a similar question to you about where we are in the lifecycle of SPACs. Unlike most of the people who we talk to who have started them, you're not a Johnny come lately to this. You've been doing blank check companies for several years now. And so as you see all of this enthusiasm and all of this money that has poured into SPACs, how has that changed for you in terms of forming them? Is it just easier to raise capital in this way? Easier to sort of get people to understand what it is? How have you thought about it differently through this process?

BETSY COHEN: Well, as I said before, I think we have chosen this SPAC because it's appropriate for the current market. And the current market on both the investor appetite side and the actual company side is one in which there are a significant number of growth companies, companies that want to tell, as Scott just described, their forward statement. They're at an inflection point of growth.

The number of SPACs, although it seems huge at this moment versus the number of potential growth companies that are available for merger into them, is really very small. I think that there'll be a shakeout because a SPAC certainly looks like it's easy to do, but takes a deep knowledge of capital markets, of investor sentiment, of actually the business itself.

As you know, I was in a business that was cognate to, started a business that was cognate to Payoneer in some ways many, many years ago. So that deep knowledge allows us to have good conversations, identify good investors who are going to be with Payoneer over the next two to five years, and hopefully, on into the future. That is not the same for either neophytes or for people who are entering this space simply to make what I'll call a quick buck.

BRIAN SOZZI: Scott, you do focus a lot, Payoneer focuses a lot on cross-border transactions. What was, how far did your business go down at the worst of the health crisis last year? And what does the recovery look like?

SCOTT GALIT: Yeah, I would say there were some uncertain days for us. We work with a lot of exporters in Asia, for example. And so COVID hit early as we started to see supply chains impacted actually in January of last year. And so there was certainly a period of uncertainty where it just wasn't clear how that all was going to shake out, not just in Asia, but in the rest of the world, we see a lot of supply chains that touch Asia.

So I'd say early Q2 we started to see things rebounding. And then as we went through Q2, we actually started to see a tremendous amount of strength really across a very broad spectrum of activity. And as I touched on earlier, we always have focused on digital business. And as a result, we've just started to see this increasing shift towards digital commerce really across all different forms. And so through the second quarter and then actually the third quarter, we just kept seeing more and more strength as these really big secular trends that we've been focused on since our founding kept putting more and more wind at our back.

So it was certainly a challenging year. Started with a fair amount of uncertainty, but as you can tell, our volumes grew well over 50% last year, and that's with some choppiness in particular in the first half of the year. So it was overall a good year. We were really excited to be able to help just so many small business owners all over the world to actually now participate in this accelerated move towards digital commerce.

JULIE HYMAN: Scott, Betsy, thank you so much for your time this morning. We really appreciate it. We hope to catch up with you both again soon as this transaction closes and you move forward. Scott Galit, Payoneer CEO and Betsy Cohen is FTAC Chairman of the Board. Thank you again to you both, really appreciate it.