Fintech Payoneer buys 5-year-old global payroll startup Skuad for $61M in cash

New York-based fintech firm Payoneer has acquired Skuad, a Singapore-based global payroll startup, for $61 million in cash, the company said in an exclusive statement to TechCrunch.

Payoneer said it could also pay another $10 million, provided Skuad meets various performance targets within the first 18 months of the acquisition. Payoneer also agreed to grant $10 million in restricted stock units that vest contingent on continued employment of key personnel. All told, Payoneer could pay about $81 million.

It’s a fairly quick exit for Skuad founder Sundeep Sahi, who started the company in 2019 with the intention of simplifying international hiring. Since then, the company has focused on helping small and midsize employers in over 160 countries (with over 100 currencies) navigate the challenges that make it difficult to build distributed teams, such as regulatory differences across markets, international payrolls, and remote onboarding.

Prior to the acquisition, the company had raised approximately $19 million in investment capital from investors including Beenext, Anthemis, NMVM, Argor Capital, and several angel investors.

Payoneer is a cross-border payment service provider for around 2 million businesses in over 190 countries and territories.

Both Payoneer and Skuad are aimed at small and medium-sized businesses operating internationally, particularly in emerging markets, while other larger payroll startups such as Deel and Rippling “tend to focus on larger companies and enterprises,” said Payoneer CEO John Caplan.

Payoneer has more than 2,150 employees. Skuad has about 200 employees who join Payoneer as part of the acquisition, according to Caplan. He declined to disclose Skuad’s financials, saying it only has a “high-growth, recurring revenue model.” Payoneer, for its part, also announced record revenue of $240 million on Wednesday, up 16% year over year, and record adjusted EBITDA of $73 million for the second quarter.

“One of the biggest opportunities that Payoneer is pursuing is to capture a share of the $6 trillion B2B market. Small and medium-sized businesses around the world are taking advantage of global opportunities by exporting goods and services across borders. For example, BPOs in the Philippines, marketing agencies in the UAE, cosmetics exporters in South Korea, etc.,” Caplan told TechCrunch. BPO refers to business process outsourcing, as the Philippines is known for its call center and other IT support services.

“Remote work is here to stay in the post-pandemic world. Companies are under increasing pressure to reduce labor costs. And we’re seeing a shift from individual freelancers to companies looking for more scalable solutions,” Caplan said.

Payoneer plans to integrate Skuad’s payroll and contract management offering into its offering.

As the fintech market suffers from a slowdown in venture capital, acquisitions among players have surged. As of mid-April, 159 deals had been announced or completed in 2024, a pace similar to last year, according to Capstone Partners.

Payoneer, which went public in 2021 via a SPAC merger backed by fintech entrepreneur Betsy Cohen (founder of The Bancorp), emerged as one of the buyers. In August 2023, Payoneer announced it was buying AI data startup Spott and that it had also bought a payments company with a license to operate in China in a deal that is set to close this year. And in 2019, Payoneer acquired a German payments startup called optile.

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