Billtrust’s new private equity owners plan to pursue mergers and acquisitions to build the business-to-business payments company into a broader platform for finance executives, the company’s recently installed CEO said.
After the Swedish investment firm EQT purchased Billtrust for $1.7 billion last September, it named Sunil Rajasekar as CEO of the company in December.
Lawrenceville, New Jersey-based Billtrust focuses on the accounts receivable side of B2B payments and automates that side of the ledger with an integrated, cloud-based software.
EQT buys businesses that it can accelerate, said Rajasekar. As an adviser for EQT, he was part of the team handling due diligence on the Billtrust purchase before being offered the CEO role.
Billtrust seeks to grow its annual revenue from $200 million to $500 million, although Rajasekar declined to identify a timeframe by which the company aimed to accomplish that.
Prior to EQT taking the company private, Billtrust founder and former CEO Flint Lane had said the company projected 2022 net revenue between $165 million and $171 million. In the third quarter, the company’s revenue was $51.4 million, a 24.2% jump year over year.
Billtrust aims to grow through product expansions, both organically and through acquisitions, although the company isn’t rushing on the latter.
“I just got here, I want to make sure that I’ve got my sea legs under me before we do anything big,” Rajasekar said. “But EQT is keen on investing more and I do see us doing some big M&A in the future.”
The company declined to be more specific on acquisition timing. EQT “will invest as necessary to fulfill the Billtrust vision,” a spokesperson said in an email.
Since Billtrust’s target customer is the chief financial officer, Rajasekar said the company is likely to pursue acquisitions that would round out its offerings for CFOs. “We do see that being a ripe area for a lot of digitization, a lot of improvement, a lot of integration,” he said.
He declined to be more specific on potential acquisition targets, noting Billtrust executives are having internal debates on which areas to prioritize, but “everything is fair game under the office of the CFO right now.”
Rajasekar estimated the market for accounts receivable automation software — the segment in which the company currently operates — is about 24% penetrated. “There’s a lot of growth to be had,” he said. He identified Versapay, HighRadius and Esker as competitors.
While many companies are pulling back marketing and some other expenses amid the darker economic climate, Rajasekar said Billtrust is not. Digitization and automation become more critical in a “cash is king” environment, he said. “I actually think customers need our solutions more so than in regular times,” he said.
Given a focus by the private equity owners on data for determining a strategy, Billtrust is analyzing the market to better understand demand for its software services, Rajasekar said. That will inform how it targets its marketing and sales efforts, he said.
The company is evaluating metrics such as the ratio of lifetime value to customer acquisition cost as it takes a “cautiously optimistic” approach to spending, he said. “That’s a key metric that we’ll be looking at, and that gives us an indication of, is the market ready for us to invest more?” he said. “And are we able to efficiently get new customers in?”