Post SPAC, India remains strategically important market: Rohit Kulkarni, Payoneer

Cross-border payments company Payoneer, which completed a business combination with special purpose acquisition company (SPAC) FTAC Olympus Acquisition Corp late last month, expects to re-invest significant capital back into key markets including India, a top company official told TechCircle.

“The total value of the SPAC plus PIPE investment was around $1.2 billion and after we paid-off some early investors, we are left with $570 million in cash. This makes us capable of growing at a rapid pace and we have already been growing at 40% year-on-year,” Rohit Kulkarni, vice president at Payoneer, said. The company has been trading on NASDAQ under Payoneer Global Inc.

While the SPAC does not fundamentally change Payoneer’s operations in India, Kulkarni said the SPAC listing will help the company leverage growth capital for reinvesting in key markets as well as new technology. India, he added, continues to be a strategically important market for the company. 

Despite the pandemic, “India was different from other markets as it couldn’t take advantage of the boom in ecommerce during the period of March to June 2020 when the national lockdown was implemented,” Kulkarni said.

While the disruption in supply chain impacted ecommerce exports from India during the earlier part of financial year 2020-21, the merchants made up for it during the holiday season of September to December, he added. As part of the recovery, Payoneer also enabled last mile services to pick, pack and ship orders for the merchants at a lower cost to ensure business continuity.

Payoneer, which works with merchants, brands and small and medium Businesses (SMBs) in India helps them list across over 2000-plus marketplaces. Kulkarni said that the cross-border transactions listed on Amazon alone have grown to $2 billion-plus now. “We bring them an ecosystem of logistics players, inventory management, translation of catalogues and a host of nearly 14 such services to grow their business,” he added.

Apart from ecommerce, the company also saw IT service providers tiding over the period as cost arbitrage played a big role in the volumes of work being sent to India. “There was a slump in November-December as companies were waiting to start new billing cycle but it had nothing to do with the pandemic,” he said. Kulkarni. 

Across the three verticals of ecommerce, IT services and freelance categories, Payoneer works with over two lakh micro, small and medium sized businesses in the country.

While the company did not disclose geography-specific numbers, Payoneer has seen its India business grow at a 165% compounded annual growth rate (CAGR) over the last four years. The company which has a presence across 200 countries and works with over 4 million users around the world as well as brands such as Amazon, Airbnb and Google reported a 61% increase in payment volumes at $13.3 billion for the first quarter of financial year 2021-22.  Revenue also increased by 23% to $100.6 million during the period.

Paypal, a global competitor of Payoneer, wound down its India payments business earlier this year to focus on cross-border payments business in the subcontinent.