Entrepreneurs who need to transfer money across borders face an "existential" problem, according to the chief of a company who says he's got the dilemma solved.
Payoneer (PAYO) -) CEO John Caplan sat down with TheStreet, in an exclusive interview at the New York Stock Exchange, to explain his business (see the video above).
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Host J.D. Durkin asked Caplan about his company and what it does.
"Payoneer is an extraordinary company," Caplan said. "What we are is a global business that enables entrepreneurs all over the world, particularly in emerging markets, to have a multi-currency account, a financial account, so they can handle their international accounts receivable and their international accounts payable."
"And if you're a business owner in Vietnam, Argentina, Turkey, Brazil, China, and you're doing business across borders, you need a Payoneer account. There are about 80 million businesses we've identified in our target," he added.
Caplan then explained his view of the rate at which Payoneer is growing.
"Our business is seeing 31% year over year growth," he told TheStreet. "We are on a path to build a really big franchise, over $800 million in revenue we'll deliver in 2023, nearly $200 million of EBITDA in 2023. This is an exciting company and a really exciting time for the global economy."
Caplan talked a bit more about about the opportunities his company sees ahead.
"So it's interesting for us. We've had 35% compound annual growth over the last three years," he said. "Ours is a business — you know, India, big part of Payoneer franchise economy. The GDP is going to grow 7% this year. Latin America, powering the growth of the economy."
TheStreet
Caplan calls out an 'existential problem'
The Payoneer CEO talked further about how, while the banking system is flawed across borders, his company believes it has a solution.
"Our business is strong and getting stronger because we solve sort of an existential problem for an entrepreneur," Caplan said. "You know, in the United States, you can feed your family, send your kids to college from Chicago, to all the demand you can drive in a day."
"But if you're in most of the world, you actually have to do business abroad, across borders," he continued. "If you do business abroad, the banking system is not set up for you to do that. It's great for the Fortune 1,000 companies, but the SMEs (small- and medium-sized enterprises) really drive the global economy."
"They need companies like Payoneer that are delivering a great account that's mobile," he said. "With all the AP (accounts payable) tools, the Payoneer card, Payoneer working capital payments within our network, we really are a financial solution for the emerging economy."
What Caplan thinks is 'amazing'
The Payoneer CEO discussed the financial power of his business and how interest rates (while holding steady since the time of this interview) affect the balance sheet.
"I think you're going to find this amazing," he said. "We have two million customers that hold $5.5 billion of funds in their Payoneer account balances. We will earn over $200 million of net interest revenue on those balances and we pay no yield to our customers."
"So because they hold a multi-currency account, the rising interest rates are actually powering a lot of the investment we're making in innovation," Caplan added. "It's really positive for the Pioneer platform.
Caplan was president of North America and Europe for digital marketplace firm Alibaba from 2017 to 2021. He offered some thoughts about what he gathered from that experience.
"So I learned a lot at Alibaba about the global economy," Caplan said. "I learned about the pace of innovation. I learned about curiosity and courage to drive markets that, you know, emerging market economies are mobile and they want great mobile solutions, solutions that feel like consumer applications."
"In the West, business applications globally are really simplified to do the core things people need, and that's what Payoneer has done."
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