Last Monday Paysafe announced plans to acquire Latin American (LatAm) financial technology platform, SafetyPayfor $441 million as part of an all-cash deal. The announcement marks Paysafe’s second LatAm acquisition in August 2021, following the acquisition of PagoEfectivo earlier in the month.. Jointly, the two acquisitions provide Paysafe with a strategic foothold in one of the world’s fastest growing online marketplaces and position the firm as a leader in open banking and eCash solutions in the region.
Founded in 2007, SafetyPay enables eCommerce transactions via open banking and eCash solutions, helping consumers without credit cards shop online. The company possesses the largest network of banks and cash collection points in LatAm, with 300+ banking partners and 180,000 cash collection points across 11 LatAm countries. SafetyPay’s merchants primarily operate within the travel, entertainment, and digital goods industries, aligning strategically with Paysafe’s core verticals.
Upon completion of the transaction, Paysafe will aim to leverage SafetyPay’s deep LatAm banking connections to accelerate integration of Paysafe’s services into the region’s open banking ecosystem. Similar to the acquisition of PagoEfectivo, SafetyPay’s CEO, Gustavo Ruiz Moya, will join the executive team at Paysafe as CEO of eCash for LatAm and Global Head of Open Banking.
Despite the strategic footprint Paysafe gained through this latest acquisition, the market’s feedback was muted by the firm’s Q2 earnings call on the same day. Although Paysafe’s revenue rose 13% from the prior year and profits improved from a net loss of $15.9 million to a net profit of $6.6 million, Paysafe’s management revised Q3 revenue guidance downward, well below Wall Street’s expectations. The firm’s falling stock price in the face of otherwise net-positive news highlights the fine line that equities straddle in today’s volatile markets. With valuations at their peak, ‘good’ news is no longer sufficient to appease institutional investors.
As of market close Friday, Paysafe is down 13% on the week and over 30% from its December 7th, 2020 SPAC acquisition announcement.
