Skuad Acquisition: Key Details, Impact, and What Comes Next

Payoneer's acquisition of Skuad for $61 million marks a significant move in the fintech industry. This strategic purchase aims to enhance Payoneer's service offerings for small and medium-sized businesses operating internationally. By integrating Skuad's payroll and contract management capabilities, Payoneer is poised to better meet the evolving needs of its B2B customers, particularly in emerging markets.

What Is Skuad?

Founded in 2020, Skuad is a global HR platform that specializes in facilitating remote team management. Its core services include global hiring through Employer of Record (EOR) and Agent of Record (AOR) solutions, global payroll in 70 currencies, and comprehensive compliance support. Skuad stands out in the market with its unified platform that streamlines international hiring, payroll, and HR operations across 160+ countries, ensuring full compliance with local employment laws and offering dedicated 24/5 customer support.

Who Acquired Skuad?

Payoneer is a global payment platform that facilitates cross-border payments, enabling businesses, freelancers, and marketplaces to pay and get paid internationally. Its key products include a multi-currency account, payment solutions for freelancers, business tools for managing cross-border payments, and marketplace solutions for mass payouts. Additionally, Payoneer offers financial services like capital advance and currency management. The company is a well-established player in the industry, supporting transactions in over 70 currencies across more than 190 countries and territories.

When Was Skuad Acquired?

Payoneer acquired Skuad on August 5, 2024. This acquisition comes at a time when the fintech industry is experiencing a surge in mergers and acquisitions, driven by a slowdown in venture capital funding. Additionally, small and medium-sized businesses are facing significant financial challenges, such as outdated payment systems and inflation, making the timing of this acquisition crucial for enhancing Payoneer's service offerings and addressing these issues.

Why Was Skuad Acquired?

• Market Expansion: The acquisition of Skuad allows Payoneer to expand its footprint in the global HR and payroll management sector, particularly in emerging markets. This strategic move aims to capture a share of the $6 trillion B2B market, focusing on small and medium-sized businesses (SMBs) operating internationally.
• Technology Integration: By integrating Skuad’s payroll and contract management offerings, Payoneer enhances its capabilities in managing international payrolls and remote onboarding. Skuad’s platform simplifies hiring, onboarding, payroll, and talent management processes for SMBs, operating in 160 countries with support for 100 currencies.
• Competitive Advantage: The acquisition strengthens Payoneer's position against competitors by addressing the significant demand from its B2B customers for advanced workforce management solutions. This move differentiates Payoneer from larger payroll management startups and allows it to offer a more comprehensive financial stack, thereby improving its competitive edge in the market.

Acquisition Terms

• Acquisition Price: $61 million in cash, with potential additional payments bringing the total to around $81 million.
• Payment Method: $61 million in cash, with up to $20 million in future payments in cash and equity contingent upon performance and tenure milestones.
• Key Conditions or Agreements:
  • Additional $10 million payment contingent on Skuad meeting various performance goals within the first 18 months.
  • $10 million in restricted stock units subject to vesting contingent on the continued employment of key personnel.
  • The acquisition provides an exit for investors BEENEXT and Argor.

Impact on Skuad

The acquisition of Skuad by Payoneer has led to significant changes in operations and management. All 200 employees of Skuad have joined Payoneer, integrating their expertise into the larger organization. This move is expected to bolster Payoneer's workforce management capabilities, particularly in payroll and contract management. The operational shift aims to enhance Payoneer's service portfolio, making it more comprehensive for small and medium-sized businesses (SMBs) operating internationally. Additionally, the acquisition provides an exit for investors BEENEXT and Argor, marking a new chapter for Skuad under Payoneer's leadership.

In terms of product offerings, the integration of Skuad’s services will significantly enhance Payoneer's capabilities. The combined platform will now offer advanced workforce management solutions, including payroll, employer of record, and contractor management. This is particularly beneficial for Payoneer's B2B customers, 25% of whom have been requesting these enhanced capabilities. While specific employee and customer reactions are not detailed, the strategic benefits and potential for cross-selling indicate a positive reception. For founders considering business transitions, tools like Sunset can assist in managing such processes compliantly, ensuring a smooth and efficient transition.