Payoneer acquires global payroll startup Skuad for $61 million in cash

New York-based fintech company Payoneer has acquired Singapore-based workforce and payroll startup Skuad for $61 million in cash. The move aims to enhance Payoneer’s services in global workforce management for small and medium-sized businesses (SMBs), The Financial Times reported on Wednesday.

According to Payoneer’s second-quarter 2024 Financial Reports, the acquisition deal could see additional payments of up to $20 million in cash and equity, contingent upon Skuad meeting certain performance and tenure milestones. Payoneer has also committed to granting $10 million in restricted stock units, which will vest based on the continued employment of key Skuad personnel. This brings the total potential cost of the acquisition to around $81 million.

“Payoneer acquired Skuad for $61 million cash, subject to adjustments and funded with cash on hand, and up to an additional $20 million of future payments in cash and equity that are contingent upon reaching certain performance and tenure milestones,” Financial Times reported.

Founded in 2019 by Sundeep Sahi, Skuad aims to streamline international hiring. The startup supports small and medium-sized employers in over 160 countries, handling challenges such as varying regulations, international payrolls, and remote onboarding. Before its acquisition, Skuad had raised about $19 million in venture funding from investors including Beenext, Anthemis, NMVM, Argor Capital, and several angel investors.

Payoneer provides cross-border payment services to approximately 2 million businesses across more than 190 countries and territories. Both Payoneer and Skuad cater to SMBs operating internationally, especially in emerging markets. This differentiates them from larger payroll management companies like Deel and Rippling, which primarily focus on larger enterprises, according to Payoneer CEO John Caplan.

Payoneer employs over 2,150 people, while Skuad has about 200 employees who will join Payoneer as part of the acquisition. Caplan did not disclose Skuad’s financial details but mentioned that the company has a “high growth recurring revenue model.” Payoneer, meanwhile, announced a record revenue of $240 million for the second quarter, a 16% increase year-over-year, and an adjusted EBITDA of $73 million.

The company also raised its 2024 guidance, noting a 22% volume growth for the sixth consecutive quarter and a 40% growth in B2B volume, which continues to drive expansion in the SMB sector.