In recent years, the cross-border payments industry has experienced a shift in its approach to public market entries. While there was once a flurry of startups going public through IPOs, direct listings, or SPACs, the trend has slowed down significantly since 2022. This change can be attributed to the tougher market conditions and economic downturn that companies are facing, making capital harder to come by and investors expecting leaner operations.
Instead of focusing on public market entries, the cross-border payments sector has seen a rise in companies going private. Several major players in the industry have exited the public markets through deals with private equity firms, such as MoneyGram, FIS, and Nuvei. These moves have allowed these companies to regroup, make long-term investments, and focus on growth without the pressure of quarterly investor expectations.
The decision to go private represents a new chapter in these companies’ growth trajectories, allowing them to operate in stealth mode and focus on long-term development. MoneyGram, for example, has increased its focus on digital offerings and attracting new customer segments, while Nuvei sees the move as an opportunity to capitalize on significant opportunities. Other companies, such as Worldpay, view the separation as positioning them for immediate success by combining the benefits of an established brand with the energy of a startup.
While the trend of going private may be on the rise in the cross-border payments industry, it does not mean the end of IPOs altogether. There are still companies waiting to make their entrance into the public markets, including Airwallex, Revolut, Rapyd, Stripe, and Nium. However, with private equity interest growing at all levels and the market conditions providing opportunities for higher-level exits, more companies in the sector may be exploring the possibility of going private in the future.
Exiting the public markets for private ownership can be a challenging process, especially for companies that have been publicly traded for a long time. However, for companies that have untapped potential and the right value proposition, going private could be a strategic move to unlock growth opportunities and operate without the pressures of quarterly investor demands. As the cross-border payments industry continues to evolve, the decision to go private may become an increasingly popular strategy for companies looking to navigate the changing market landscape and focus on long-term growth.
