Axios Pro: Fintech Deals

January 10, 2023

Axios Pro Exclusive Content

Happy Tuesday!

Situational awareness: Coinbase makes yet another round of cuts, announcing today that it's laying off 950 employees and shutting down several projects.

  • "As Coinbase grew so quickly in 2021, we all felt the coordination headwind that caused us to move more slowly," CEO Brian Armstrong wrote this morning. "Over the past ten years, we, along with most tech companies, became too focused on growing headcount as a metric for success."

1 big thing: Who's next in payments deals?

Illustrated collage of measurement lines and targets highlighted by abstract circles.

Illustration: Aïda Amer/Axios

Nuvei's deal has kicked off the payments speculation game for 2023, Lucinda writes.

Why it matters: More consolidation in the space is seen as inevitable, and the game is on to see which company could be the next M&A target.

Driving the news: In a note Monday following Nuvei's $1.3 billion deal for Paya, Truist Securities analysts identified a handful of smaller, publicly traded companies ripe for takeover.

  • The note lists fintechs Repay, Green Dot, Shift4, Euronet, and WEX as the "greatest potential beneficiaries of these announced transactions as investors consider other potential acquisition targets."
  • Repay and Green Dot have a market cap in the $800 million range, Shift4 at about $4.8 billion, Euronet at about $4.9 billion, and WEX at about $7.4 billion.
  • Truist also pointed to Lightspeed Commerce, Affirm, Marqeta, and Flywire as potential targets.

Of note: Marqeta at least has expressed no interest in being acquired, with voting control resting with its founder, Jason Gardner.

Bottom line: Nuvei's acquisition of Paya at a valuation the latter once held in 2020 gave hope to investors in some other payments companies that an acquirer could swoop in at a higher price.

  • Shares of Repay, for instance, closed up by 5% Monday.

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