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M&A dealmaking within the tech startup world has been slow throughout 2023. But North Carolina-based Payzer has bucked that trend with the announcement this week that it has signed a definitive agreement to be acquired.
The Charlotte fintech and software platform for contractors is to be acquired by Wex, a financial technology service provider that went public in 2005.
The deal is set to be approximately $250 million (or as high as $261 million) and is expected to close by the end of the year, according to a press release from Wex.
Wex, a Maine-based company, is a financial technology provider for fleet, travel and healthcare industries. Payzer helps service providers (think contractors, plumbers, electricians, and pest control experts) streamline their business operations. The Payzer platform sits at the intersection of payments and SaaS and offers customers scheduling, dispatching, customer communications, invoicing, sales proposals, supply ordering, and maintenance agreements.
Understanding The Acquisition
The acquisition is strategic since Payzer’s customers overlap with Wex’s current customer footprint, a spokesperson for the company told Hypepotamus. The move is designed to help Wex strengthen its relationships with customers in the Mobility segment, the spokesperson added.
Wex’s Mobility segment currently include 600,000 customers and approximately 19 million vehicles.
Founded in 2014, Payzer most recently raised a $23 million Series D round in 2021 from lead investor Harbert Growth Partners. Other investment firms backing the company include IDEA Fund Partners, Route 66 Ventures, Grotech Ventures, Ferguson Ventures, and Alerion Ventures. It has two products – Payzerware and Payzercare.
The founding team of Doug Little and Joe Giordano has grown the team to around 150 people.
This is Wex’s second acquisition of the year, with the team announcing in July it was acquiring record-keeping service provider Ascensus LLC in an all-cash $180 million deal.
Startup M&A activity has slowed significantly this year, with the number of deals involving VC-backed startups dropping from 919 to 629 year-over-year, according to available Crunchbase data.
High interest rates and economic uncertainty are still to blame. So the Payzer acquisition is welcomed news to those looking for exit opportunities within the tech world.