Dive Brief:
- Activist hedge fund Starboard Value plans to nominate a slate of “highly qualified” directors at Bill Holdings to seek changes after amassing an 8.5% stake in the payments and financial operations software firm, the fund said in a securities filing.
- “We intend to engage with Starboard to understand their views as we do with other shareholders,” Bill said Thursday in a statement responding to Starboard’s stake, disclosed the same day.
- Bill shares have declined 40% so far this year – to $50.20 Monday – and sit 85% below their $342 peak in November 2021. Bill’s board authorized a new $300 million share repurchase program last month, atop $100 million in shares the company has repurchased so far in 2025.
Dive Insight:
Bill, based in San Jose, California, sells bill-pay and other accounting software services to small and mid-sized businesses. Chief Executive René Lacerte founded the company 19 years ago and it went public in 2019.
Starboard said in a securities filing Thursday disclosing its stake that it has begun talking “with management and the Board regarding opportunities for value creation, Board representation and the composition of the Issuer's Board, generally.”
A third of Bill’s 12 directors’ terms expire this year, according to the company’s 2024 proxy filing.
Starboard will nominate four directors for Bill, including a managing member at the investment firm, Peter Feld, who is also its head of research, Reuters reported Monday, citing two people familiar with the matter. The others are Liat Ben-Zur, a technology consultant and former Microsoft executive; Nancy Disman, the former CFO at Shift4 Payments, who resigned last month; and Frank Young, a former Global Payments executive.
The New York-based hedge fund did not respond to an email seeking comment on its proposals for Bill. “We will consider Starboard’s nominees pursuant to established processes,” Bill said Tuesday in an emailed statement.
Starboard and its founding CEO, Jeff Smith, became widely known for orchestrating the ouster of the board at Darden Restaurants, the parent of the Olive Garden and LongHorn Steakhouse chains. That 2014 effort followed a vigorous public campaign that included an excruciatingly detailed plan to reform Olive Garden’s operations.
“We believe in Bill’s future and are confident in our ability to drive revenue growth and profitability, and create sustained value for our customers, partners, and shareholders,” the company said in its response to Starboard’s investment.
Bill’s revenue growth has been pressured recently as its small and mid-sized business customers have faced financial uncertainty due to the Trump administration’s tariffs and an unclear outlook for the U.S. economy, the company’s executives noted last month. Over the longer run, Bill has increasingly faced competition from a slew of payments rivals, including Intuit and Stripe.
That has prompted many smaller companies to trim their spending, Bill executives said Aug. 27 in a quarterly earnings call with analysts, concluding the 2025 fiscal year. Bill offered revenue guidance for the 2026 fiscal year that was below analyst expectations, leading to questions on its earnings call about whether the company was being overly conservative in its outlook, or if its customer volumes would deteriorate materially.
“We’re trying to be prudent with the environment that our SMB customers are operating in, and make sure that our expectations are reflective of recent trends that we’ve seen in spend patterns and make sure that we’re not getting ahead of our skis on expectations, just given the number of uncertainties that exist for for small businesses,” Bill President and Chief Operating Officer John Rettig told analysts.
The 2026 outlook implies flat customer volume growth, William Blair analysts Andrew Jeffrey and Jake Roberge wrote in an Aug. 28 client note. “Although Bill has a first-mover advantage in a fragmented B2B space, in our view, new entrants including Fiserv’s CashFlow Central and Stripe Billings raise potential competitive challenges.
Bill will continue to face near-term “macro pressures,” Mizuho Securities analysts led by Siti Panigrahi wrote Aug. 27 in a client report. “Over the medium to longer-term, we believe Intuit’s recent launch of QuickBooks Bill Pay could pressure new customer additions given its cheaper pricing and native integration with QuickBooks (where there is significant overlap with Bill’s customer base).”
Activists have targeted other payments players in recent years. Elliott Investment Management took a stake in Global Payments this year, the Financial Times reported July 15. Elliott also took a $2 billion stake in PayPal Holdings in mid-2022, with CEO Dan Schulman announcing his departure in early 2023.
In 2022, Fidelity National Information Services agreed to add a new director and undertake a thorough business review after two activist hedge funds, DE Shaw and Jana Partners, acquired a stake in the financial technology and services company.
