Home Private Equity Is Going Private The New IPO For Cross-Border Payments?

Is Going Private The New IPO For Cross-Border Payments?


A few years ago, public market entries were big business in the cross-border payments space. Through IPOs, as well as the occasional direct listing or SPAC, a host of formerly disruptive startups found their place among the fintech mainstays, where they continue to grow and shape the industry.

Between 2020 and 2021, cross-border payments welcomed a flurry of new players to the public markets, including Payoneer, Flywire, Remitly, dLocal, Nuvei and Wise. However, from 2022, things began to cool, and by 2023 an IPO was a considerably rarer occurrence, reserved largely for niche players.

This downturn in public entrants is largely attributable to the wider economic downturn and tougher market conditions that players now operate in. At all levels, capital is harder to come by than it was a few years ago, and companies are generally expected to operate more leanly and cleanly by investors.

Meanwhile, cross-border payments has seen the rise of another market move: going private. Through deals with major private equity firms, several companies have now exited the public markets either wholly or partly and, given the benefits, we may yet see more follow suit.

The rising trend in going private among cross-border payments players

Although a practice not unique to cross-border payments, we have seen a number of companies in the space exit the public markets over the past year.

In mid 2023, remittances major MoneyGram brought an end to a 19 year-long stint on the NASDAQ
when it completed an acquisition deal with private equity firm Madison Dearborn Partners, first announced in February 2022.

Speaking with me shortly after the move was finalized, MoneyGram CEO Alex Holmes said that the process required “an extraordinary amount of time, effort and heavy lifting” but showed that it could be done.

“There was a question for a long time of whether it was actually possible,” he said.

Since then, others have followed suit. In July 2023, publicly traded FIS
announced that it was selling off the majority stake of Worldpay
, a previously standalone company that had become FIS’s merchant solutions division when it was acquired in 2019, to private equity company GTCR. Under the deal, which completed in early 2024, Worldpay once again became a private standalone company.

Most recently, in early April 2024, Canadian player Nuvei, which has gained awareness due to celebrity investor Ryan Reynolds, announced that it was going private through a deal with Advent International. This represented a much faster exit from the public markets than for MoneyGram: Nuvei first listed in Canada in what was then the country’s biggest ever tech IPO in 2020, before having a second IPO in the US in 2021.

Why are companies going private?

While public market entries are often thought of as the endgame of a company’s growth, going private represents a different mindset, built on the idea that either state is a temporary and changeable part of a company’s lifecycle.

Within this, going private represents an opportunity to regroup, build and grow without the need to appease investors on a quarterly basis. Companies are freer to make long-term investments that do not have to show immediate returns and in the current market environment, where activist investors are particularly active, this is likely to be particularly appealing.

MoneyGram’s Holmes described the return to private as “an opportunity to do things in stealth mode”, with the company increasing its focus on its digital offering as well as attracting new customer types.

“Bringing in new consumers that have a cross-border need, that aren’t that traditional remittance customer all the time, is a really important evolution of the company and the brand,” he said. “So we’re excited about that.”

The idea of such a move being an opportunity for development has been echoed by other companies, with Nuvei CEO Philip Fayer characterizing the move as an “exciting new chapter” that would allow the company to “capitalize on significant opportunities” in the press release announcing the news.

Meanwhile Charles Drucker, CEO of Worldpay, described the company’s own separation as positioning it for “immediate success” by “combining the benefits of a well-established global brand and group of talented payments professionals with the energy of an independent startup”.

Will more players follow suit?

Providing a fresh cash injection alongside reduced market scrutiny, a private move is an appealing option for players in the cross-border payment space and beyond.

This certainly does not mean the death of the IPO. While the pace of new market entries has certainly slowed significantly over the past few years, there are a number of companies waiting in the wings for their entrance. Over the next few years, we may see players including Airwallex, Revolut, Rapyd, Stripe and Nium all IPO. We are also likely to see more public entries from companies currently building a reputation in emerging markets, where some of the biggest opportunities for growth currently sit.

Nevertheless, private equity interest in payments is palpable at all levels, and with less venture capital focus on early stage players, as well as tougher market conditions providing increased opportunities at higher levels, it is likely that there are companies currently exploring the possibility of a market exit at present.

It is important to note how challenging such a market exit can be, particularly for those who have been publicly traded for long periods of time, and it will not be a good fit for every company in the space. However, for those who have underutilized opportunities ahead of them, as well as the right combination of value and potential, it may prove to be a vital move.

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