Navigating Turbulence in Business-to-Business Payments: Flywire Soars Amid Challenges
In an exclusive interview, Mike Massaro, the CEO of Flywire, discussed the company's journey through 2020 and its plans for the future. Flywire, a receivables payments unicorn, defied expectations by growing at a rate of 35-50% in 2020, despite the challenges posed by the pandemic.
The company is expanding its product offerings to include travel and business payments segments in 2021. Unlike most companies that focus on accounts payable, Flywire is focusing on the accounts receivables side of B2B payments. This strategic move is part of the company's growth strategy, which includes geographic expansion and the development of new verticals.
Flywire plans to expand its customer base primarily in North America and the Asia-Pacific region in 2021. The company's revenue growth is linked to the growth of its customers' businesses, a concept referred to as "natural cohort growth."
The travel industry has been hit hard by the pandemic, but has shown resilience, with many shifting to domestic or regional travel. This shift presents an opportunity for Flywire in the travel payments segment. Additionally, some students opted to defer their studies to 2021, which could lead to an increase in tuition payments for the company.
The academic year of 2020 saw some of Flywire's Covid-19 growth driven by revenues from 2019. Approximately 95% of Flywire's revenue in 2020 was from recurring sources, primarily enterprise customers. This recurring revenue makes Flywire an attractive prospect for either the public markets or a strategic player.
The company has clients paying tuition fees from 32 countries, each market offering local product development opportunities. Currently, approximately 65% of Flywire's business is in the education sector. Flywire's expansion into the travel and business payments segments aims to diversify its revenue stream and reduce its reliance on the education sector.
Massaro stated that there are only three routes a venture-backed business can take: fail, be acquired, or go public. Flywire's choices are now down to just two of those options. With its strong growth and strategic expansion plans, it seems that Flywire is well-positioned for success in the coming years.
The article was published on LinkedIn by Cristina Topolnicki.
