In a welcomed bid to make commercial blockchain-based solutions more accessible across the Americas, the B2B payments platform Paystand has acquired the procurement platform Yaydoo, a provider of accounts payable, cash flow management and liquidity solutions in Mexico and LATAM.
In the midst of economic uncertainty, the fusion of the two companies represents one of the biggest technology unions in Mexico and LATAM.
Both companies offer a varying array of technology-enabled B2B solutions for automating transactions, payment and bill collection processes.
The acquisition is an appropriate move, as both companies have created successful B2B DeFi payment networks that are applicable to businesses across both sides of the continent.
Now, according to the official announcement, they have set their sights on connecting their platforms through a single, open and secure global payment network.
“The combined company will be one of the first global B2B blockchain platforms at a significant scale,” comments PayStand CEO Jeremy Almond.
“The resulting company will have processed over $5billion in payments, added 300 additional employees, and built a network of over 500,000 connected businesses, the largest of any commercial B2B blockchains in the world.”
Almond explains how on-chain DeFi-enabled B2B payment networks have the ability to “unlock transformative working capital efficiencies” while making financial services more accessible to developing markets like LATAM.
How the traditional payment sector is holding back the economy
In the US, persistent inflation and higher interest rates have made working capital more important and ever more difficult to come by. As CFOs hunt for more cash, they increasingly look to technology to achieve greater economies in the mission-critical cash cycle.
Nearly half of the $18 trillion in commercial payments in the US are still paper checks, according to Deloitte, and the vast majority of the rest are still performed through a manual or pre-internet process.
Automation using Web3 technologies across AR, AP, expense, procurement and payments in a unified platform offers huge cash advantages to enterprises, helping the US B2B payment market to hit a projected CAGR of more than eight per cent over the next five years.
According to the findings of Goldman Sachs, the global B2B payments market reached $940billion in value in 2021, with AR/AP software accounting for $130billion of the total market size.
Although this figure is significant, currently it only accounts for the companies that are already using software or digital AR/AP solutions. In LATAM specifically, less than five per cent of companies are digitally enabled, implying that the B2B payments opportunity in places like Mexico and other emerging markets offers a much larger green field.
“Yaydoo and Paystand have enabled B2B payment networks through their AR/AP software landscape. Now it’s time to join forces and deliver solutions that will simplify and digitalise trade among the US and Mexico, unlocking a set of opportunities for automating supply chain finance through the imports and exports of one of the most active trade corridors globally,” said Sergio Almaguer, CEO of Yaydoo.
“Connecting the US and Mexico is only the first step. We understand very well that each country has its own payables and receivables solutions enabling B2B payments locally. We want to forge long-time alliances with all these organisations that already know their market in order to build a network that embraces the entire continent,” concluded Almaguer. He will continue leading the Latin American expansion of the combined company.
The combined organisation is set to create high-return synergies including access to new markets, product offerings, distribution channels and talent.
In the Americas, the acquisition will have the capacity to expand from the US to Canada, and from Mexico to Colombia, where Paystand’s and Yaydoo’s products can be distributed through existing channels and integration partners.
Currently, the companies have already integrated globally with Oracle NetSuite, Sage Intacct, Xero and with CONTPAQi in Mexico, enabling access to the largest and most sophisticated mid-market opportunity on the continent.
There is a significant market opportunity in front of Paystand and Yaydoo. With its scale the combined company could be on a path to an initial public offering (IPO) in the next two years, re-opening IPO capital access to the tech sector that is struggling in a recession-prone environment.