More consolidation is apace in the world of payments: Nexi, the Italian fintech that scooped up rivals Danish-based Nets and then Italy’s SIA to create a $12.5 billion European payments giant, has made another acquisition, this time to dig deeper into financial services for small and medium businesses in the region. It has fully acquired Orderbird, a startup out of Germany that provides point of sale products and related services for restaurants and other businesses in the hospitality industry, with 14,000 active clients.

Terms of the deal are not being disclosed — Nexi notes an “aggregate cash out of ca. €100 million including also previous share purchases” — but sources have confirmed to us that the all-cash deal values Orderbird in the range of €130 million -140 million ($140 million – $150 million). The previous share purchases refers to an existing relationship between the two: Nets already had a stake in Orderbird as a result of an acquisition it had made of payments company Concardis, and it increased that stake to 40% in a secondary transaction in September 2021. At that time, the deal valued Orderbird at €100 million, making today’s price a bump on that.

In addition to payments company Nets/Concardis, Orderbird’s other investors had included Digital+ Partners and Metro Group, and it had raised around $55 million in all.

Orderbird will continue to operate as its own brand, becoming a central part of Nexi’s push into the SMB segment. Current management, which includes CEO Mark Schoen and CSO/founder Jakob Schreyer (pictured below), will also stay on board post-transaction.

From what we understand, Orderbird had been looking at other acquisition offers, including one from another point of sale company, as well as investment options. One of those investment options would have included Toast, the U.S. restaurant point of sale giant, taking stake in the company. Ironically, now it’s become part of a company that will realistically represent an even bigger rival to Toast in Europe (and potentially elsewhere).

Given the state of the public markets at the moment, and the trickle-down effect for later-stage companies finding it challenging to close rounds, the valuation that Orderbird was seeing in those potential deals was first viewed as decent, then not bad at all, to ultimately lucky. Warm is the new hot, it seems.

In the end, Orderbird went for an exit rather than an investment, as a more assured path for the kind of scaling that it wanted to do.

“Making neighborhood businesses more successful is what Orderbird is all about. One of the reasons our customers are successful is because they are always digitally up to date with us and can use the same technologies as their larger competitors,” said Schoen in a statement. “Joining forces with the Nets / Nexi Group, a recognized European PayTech leader, allows us to take this mission to the next level. This will collectively enhance our business presence in Europe while continuing to provide our customers with the best and most relevant solutions they need today – and tomorrow.”

“I want a great future for the company,” Schreyer told me in a phone interview. “What Clover did for First Data, we want to do for Nexi. We want to be at the heart of its SMB strategy.” That will likely include deeper moves into providing more banking and credit services to its customers, in addition to point of sale solutions.

The deal points to a new chapter for companies in this space after a dramatic period of getting through Covid-19 and the ups and downs associated with that. Lockdowns threw the hospitality businesses into disarray: some went into a kind of hibernation, others pivoted and worked on how to provide their services through the pandemic (for example with big shifts into home delivery of prepared food and away from in-person dining), and yet others closed up shop altogether. All that had a huge knock-on effect for companies like Orderbird, which adjusted to those “new normal” cases, too.

Schreyer said that Orderbird flitted between being an uncomfortable and ill-fitting partner through to “hero” depending on the state of each individual business and what was shifting in the wider market. Despite all of that, the company overall grew ARR by 35% during the period and actually turned profitable — not because business boombed but because Orderbird itself turned to right-sizing and cutting out all of the cash-burning efforts it was making to grow pre-Covid.

It will be interesting to watch how Orderbird flies on the windstream of a new, much bigger owner.

“Together with Orderbird, we underline our commitment to the integrated software market, while enhancing our offer to hospitality clients.” said Robert Hoffmann, CEO of Nets Merchant Services and Concardis, in a statement. “Our goal is to support European businesses benefit from the rapid digitization of payments, via solutions like Orderbird’s hospitality-focused SaaS platform, which enhances the customer experience while enabling merchants to run their business more efficiently. We’re proud to fully welcome Orderbird to the Nexi family as it continues to meet evolving customer preferences in restaurants and beyond across Europe.”

Source: TechCrunch

The post Nexi, the Italian payments giant, buys Germany’s Orderbird for $140-150M to expand its SMB strategy appeared first on CableFreeTV.

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