Dive Brief:

• Bill Holdings shareholder, Barington Capital Group, urged the finance and payment software company to cut operating expenses and explore potential strategies to turn its business around, according to a Thursday press release.
• The company’s board of directors should work with a financial advisor and form a special committee of independent directors to weigh its options, such as considering a potential sale, merger or other strategic alternative, a Barington letter to Bill Holding’s lead independent director Allie Kline said.
• “Barington therefore urges the Board to ensure that management operates the business with greater cost discipline, so that Bill can better leverage its revenue growth into increased profitability and stronger cash flows,” the Dec. 4 letter from Barington’s CEO, James Mitarotonda, said.

Dive Insight:

Barington Capital Group joins a chorus of voices calling for Bill to rejuvenate its business. In September, Starboard Value, an activist hedge fund, announced its plans to nominate a group of “highly qualified” directors at Bill to reshape the company, a move it made after acquiring an 8.5% stake in the business. That month, another activist investment firm, Elliot Management, acquired a 5% stake in the company.

While the San Jose-based Bill is capable of growth, particularly in the business-to-business segment, the company faces increased competition and is struggling to monetize its services, Barington said in its letter. 

While the investment firm highlighted Bill’s 500,000 customers and $350 billion in payments processing, praising the “healthy” volume growth rate of 10% to 15% annually, Barington called attention to Bill’s lower share price. Bill’s stock price has declined about 36% this year.

“We invested in Bill because we believe that the Company has built a strong financial operations platform whose intrinsic value – while not currently reflected in its stock price – can be unlocked through decisive action by the Board,” Barington wrote in its letter. 

Though investors have decried Bill Holdings’ performance, the company has defended itself against its critics.

In September, the company’s founder and CEO, René Lacerte, noted during an investor conference that the current board “has always actively thought about shareholder value and how you create more shareholder value.” Lacerte also highlighted the company’s accomplishments at that point, such as increasing its investments to catalyze company growth, growing its revenue and generating higher non-GAAP profits compared to the past three years. 

As the company faces mounting criticism from investors, Bill has cut employees. In October, the company reduced its workforce by 6%, shedding 140 workers.

A spokesperson for Bill didn’t immediately respond to a request for comment.