The CEO of Bulgarian spend management unicorn Payhawk has played down the threat of US rival Brex, which recently announced it was launching across the EU, saying they were targeting different customer bases and that the EU was a fragmented market.
Payhawk CEO and co-founder Hristo Borisov also said that Payhawk was not pursuing an IPO in the near term, but was keeping its options open regarding a potential listing venue if and when it decided to go public.
Borisov said: “We’re keeping optionality. The US offers deep capital markets for large SaaS/fintech issuers; Europe is core to our business and talent footprint. We’ll choose the market that best matches our scale and investor base when the time is right.”
Payhawk, which became Bulgaria's first-ever unicorn in 2022, now employs around 480 people with offices in Sofia, London, Berlin, Barcelona, Amsterdam, Vilnius, Munich, Paris, New York and a soon-to-open new office in another European city.
Payhawk offers customers spend management services, so employees can manage their spending lifecycle, from company card to bills and invoices in one place.
Payhawk, founded in 2018, reported revenues of €23.4m in the year ending December 2024, up 85 per cent on the year, but it is not yet full-year profitable.
The boost in revenues was attributed to the scale-up offering a broader suite of services, on top of its corporate cards, including travel, accounts payable and procurement services.
Currently, around 95 per cent of Payhawk's revenues come from Europe.
Earlier this year, San Francisco-based spend management rival Brex said it was launching in the EU, having bagged an EU Payment Institution licence.
But Borisov played down the threat from Brex, saying the US firm had a different target market to Payhawk, targeting startups and small businesses with up to 40 people.
Borisov: "We are usually owning the mid-market space, the more mature companies, so that is a key differentiator."
Furthermore, he also pointed out that the EU was a fragmented market, with different rules across areas like payments and currencies.
He added: "You don’t have to win in one market, you need to win in 29.”
Big incumbents like American Express also have a major presence in the corporate card market.
In the US, Borisov said he expected Payhawk’s US revenues to grow as much as 30 per cent of its overall revenues in five years. He said US businesses were more amenable than European businesses to working with startups and scale-ups like Payhawk.
Borisov also pointed to Payhawk’s different strategy in the US to Brex, valued at $12.3bn in 2022, and Ramp, another US rival, valued at $22.5bn earlier this year.
He said the two firms had gained traction by giving out free corporate cards to startups and small businesses.
He said: “The problem we have seen in the US is that the spend management market has been a market which has been heavily subsidised from a go-to-market perspective.
"From a price perspective, there are several companies that have already raised more than $3 billion. The way they compete is really heavily subsidising the product.
"What we have been trying to do in the US is if they are playing that game, to try and change the game, so instead of us offering a free product and trying to monetise the customer later on, we have tried to build something sustainable that customers are willing to pay with right now.”
Instead of offering its own corporate cards, Payhawk offers services on top of existing card giants like Visa and MasterCard.
Borisov also said that Payhawk, which has yet to make any acquisitions, was currently being turned off from making acquisitions by, generally speaking, prices being too high for potential targets, saying startups were clinging to their high valuations of 2021.
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