The cross-border payments sector has seen a shift in recent years from a focus on public market entries to an increase in companies going private. Between 2020 and 2021, there was a surge of new players entering the public markets, but by 2023, this trend began to slow down due to a tougher market environment. Capital is now harder to come by, and companies are expected to operate more efficiently to meet investor expectations.
A number of companies in the cross-border payments space have opted to exit the public markets and go private through deals with major private equity firms. MoneyGram, a remittance major, ended its 19-year stint on the NASDAQ in mid-2023 after being acquired by Madison Dearborn Partners. Other companies that have followed suit include FIS, which sold off the majority stake of Worldpay to GTCR, and Nuvei, which announced its move to go private with Advent International.
The decision to go private offers companies the opportunity to regroup, build, and grow without the pressures of appeasing investors on a quarterly basis. It allows them to make long-term investments that may not yield immediate returns and avoid market scrutiny. MoneyGram’s CEO highlighted the chance to focus on digital offerings and attract new customer segments, while other companies see it as an exciting new chapter for growth opportunities.
While some companies are opting to go private, the IPO market is not dead, and there are still companies waiting to make their entrance. Players like Airwallex, Revolut, Rapyd, Stripe, and Nium are potentially gearing up for IPOs in the coming years. However, private equity interest in the payments sector remains strong, with more companies exploring the possibility of making a market exit. The tough market conditions and reduced focus on early-stage players are creating opportunities for companies to consider going private for a fresh cash injection and reduced market scrutiny.
The process of transitioning from a public to a private company can be challenging, especially for those who have been publicly traded for a long time. It may not be a suitable move for every company in the space, but for those with untapped growth potential and the right combination of value and potential, going private could prove to be a strategic decision. The trend in the cross-border payments space towards going private reflects a shift in the market dynamics and the changing preferences of companies looking beyond the traditional routes of growth and expansion.
