When it comes to stock market debuts, 2024 was not an active year for many industries, not least cross-border payments. Only a handful of companies IPO’d in the payments sector in the last year, with more companies either completing or announcing a departure from the public markets, typically through a deal either partially or wholly with a private equity player.
2025 is set to be different. This is not the return of 2021, when a flurry of cross-border payments players made their public entries in a combination of IPOs (Remitly, Flywire and dLocal), SPAC mergers (Payoneer) and direct listings (Wise). Then, a combination of attractive market conditions, investor expectations and broad entry options allowed these former startups to step into the public markets at strong valuations and to investor enthusiasm.
Cross-border payments and the public markets of 2025
The financial landscape is quite different today. Enthusiasm for SPACs has all but disappeared, with lessons learned from some of the less successful listings.
At present, market conditions are showing positive signs, but with caveats. Steady improvements in 2024 put them in a generally promising position for 2025; at the time of writing the S&P 500 was up by more than 25% on a year ago, while in the UK the FTSE 100 is up by more than 13%. However, with provocative policies already lining up from the incoming US administration, there are concerns that this year will see periods of turbulence and volatility.
Meanwhile, the would-be market entrants themselves are different. While four years ago many companies were debuting at the peaks of their valuation, the post-pandemic market conditions prompted a slump for many companies that they are still catching up with.
Payments processor Stripe, for example, saw its valuation peak at $95bn in 2021 before ultimately dropping to $50bn in 2023. Last year it upped this to $65bn – a significant improvement but still much below the level that some investors bought in at. And while this is an extreme example, there are similar situations with a number of companies.
There are now a slew of rapidly maturing players that are in many ways more than ready to IPO – and in different market conditions would already be public – but where there are still questions over valuation. Investors, meanwhile, will naturally be looking to get the best possible return on their investment, but will also be conscious of a ticking clock.
Some companies, such as Santander’s B2B payments-focused Ebury and Swedish BNPL major Klarna have already appointed banks to begin the IPO process, while Singaporean payments infrastructure player Nium is among those who have previously highlighted 2025 as a target year for a public debut. The challenge is ultimately going to be to achieve the best possible valuation as quickly as possible, while market conditions still remain favourable.
The rise of private equity-backed public market exits
There is also now a far greater trend for market exits in cross-border payments than was the case a few years ago. After the 2023 completion of Madison Dearborn Partners’ acquisition of MoneyGram took the money transfers player private after a 19-year run on the NASDAQ, other players have also been exploring the option.
This has been particularly appealing for players who, like MoneyGram, have traditionally been retail-focused and are now investing in a shift to digital. In November, Intermex, a Latin America-focused money transfers player traditionally catering to the blue collar retail market, announced that it was considering a similar move.
For others, it has been a means of powering financial restructuring and M&A activity, such as was the case for Canada’s Nuvei when it announced an acquisition by Advent International in April 2024. By contrast, last February also saw the completion of a deal between FIS and private equity player GTCR focused on undoing the former’s acquisition of its merchant solutions business Worldpay to once again become a standalone company.
This trend is by no means over. In addition to Intermex’s announcement, there have also been rumors of potential exits via similar means surrounding both Flywire and dLocal, although the latter’s CEO denied the rumours earlier this month.
Private equity players, meanwhile, are increasingly looking to cross-border payments as an attractive investment option. With a TAM that is set to climb to $65tn by 2032, according to my company FXC Intelligence, as well as strong potential for further expansion, consolidation and digitization, the industry has plenty of headroom to grow and companies in need of investment.
While many publicly traded cross-border payments players ended 2024 up on where they started, there are those who, alongside dLocal, Intermex and Flywire, saw their valuations drop. Private equity players are therefore likely to see some of these as strong potentials for an investment-fuelled turnaround.
Will market conditions hold?
2025 presents strong possibilities for public markets in the cross-border payments industry, but only if favorable conditions hold. And with the potential for trade tariffs and other macroeconomic upheavals, this is by no means guaranteed.
While valuations both on and off the markets may be rocked by changing financial conditions, such policies may also have a profound impact on the global flows of trade – with inevitable knock-on impacts for the cross-border payments companies facilitating the money movements that back them. For many, this will ultimately present opportunities, but it may also cause significant issues for some, and will undoubtedly prompt uncertainty in some corners of the market.
Regardless of the conditions, we are certainly set for a busy year in the industry – whether that leans more towards market entries, market exits or a combination of both.
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