Billtrust CEO Flint Lane sees no shortage of acquisition options in the rapidly evolving business-to-business payments space, and he aims to continue the company's recent buyout streak.
Its $59.9 million acquisition of Amsterdam-based Order2Cash in February and its $58 million acquisition of Belgium company iController in October 2021 have established a European presence for Billtrust, Lane said.
iController focuses on automating the collections process, while Order2Cash offers a variety of global solutions in the automated receivables area for mid-market and enterprise businesses.
With those acquisitions, Lawrenceville, New Jersey-based Billtrust now has about 2,400 customers. “We’ve added quite a bit of girth in Europe, and we’ve told the markets that we’re going to be acquisitive,” Lane said.
Those were Billtrust’s 9th and 10th acquisitions, Lane said. The company became a publicly-traded company in October 2020 through a special purpose acquisition company, or SPAC. That deal was partly to allow the company to be more acquisitive, Lane said.
Seeking to return to profitability
Founded in 2001 by Lane, Billtrust is focused on the accounts receivable side of B2B payments and enables its customers to automate that side of the ledger with an integrated, cloud-based platform.
Earlier, Lane founded another business in the industry, bill payment company Paytrust. The assets of that New Jersey company, formed in 1998, were sold to Metavante in 2002.
Billtrust has projected net revenue will be between $165 million and $171 million this year, Lane said. As far as past performance, he noted the company remained profitable during the start of the COVID-19 pandemic. That's not the case now, though he expects the company to return to profitably in late 2023 or early 2024.
The company "tapped the brakes a little bit on the spend” after the pandemic showed up, Lane said, but is not doing that now as it pursues growth, Lane said.
Billtrust plans to target one to two deals annually, he said, adding that there will be “years that we do no deals and years that we do three deals.”
He wouldn’t comment further on future opportunities this year, other than to say there's plenty of potential targets. The company may make acquisitions that allow additions to its product suite, or consider "competitive roll-ups" that would allow geographic expansion into new territories, Lane said. The company may also seek to build on its business payments network, he said.
Expanding business payments network
Billtrust's business payments network, which Lane called “sort of a Venmo for B2B,” saw total payment volume grow by 86% in the first quarter, over the period last year, to $3 billion. That network “remains a highlight,” with triple-digit-growth expected this year, analysts with William Blair noted in a recent report.
While the B2B area of payments has sped up efforts to digitize in recent years, there is still an abundance of paper checks in business payments in the U.S., “because there’s no easy way for a buyer to know how to pay a supplier electronically,” Lane said.
That prompted Billtrust’s creation of its business payments network in 2017. On the buyer side, Billtrust offers accounts payable companies the ability to pay suppliers electronically without asking for bank account details. On the supplier side, Billtrust has a digital lockbox, a similar concept to a check lockbox at a bank, that automatically opens envelopes and processes payments for businesses.
American Express recently announced a partnership with Billtrust, “so that we could help their merchants drive more digital acceptance with our digital lockbox,” Lane said.
Adding bank partners
Billtrust also is trying to convince banks they should offer a digital lockbox to their treasury clients; that’s a component of the company’s expanded relationship with KeyBank. Lane expects to announce more bank partners in the future, but couldn’t provide a more specific timeframe.
“If we are able to accelerate our growth by arming banks with the digital lockbox and they can offer it to hundreds if not thousands of treasury clients, that’s a win for us and a win for them,” Lane said.
Billtrust – which mainly makes money through software subscription services – is typically competing against accounts receivable tools that are homegrown and “wildly inefficient” for businesses, the CEO said.
Accounts receivable and accounts payable are “an enormous market that is ripe for innovation,” with a number of companies looking to do away with paper invoices and paper checks, Lane said.
Check volumes are still significant in the B2B space, but they are declining. Mail delays have slowed invoices and check delivery, and “there is a significant push to digitize because of the work-from-home dynamic,” he said.
Automation in accounts payable and receivable that work together is the key to "driving checks out,” Lane said.