The VC landscape has become significantly tougher over the last few years, making raising funding considerably more difficult for startups. Meanwhile, the same environment has created new M&A opportunities, as those struggling to find growth or runway are snapped up by companies looking to consolidate. With this in mind, how has funding and M&A activity fared in Q1 2024 for cross-border payments, and what does it tell us about the year ahead?

While most of the main M&A in Q1 were small to mid-sized deals, one stood out as considerably bigger: Capital One’s acquisition of Discover. One of the biggest deals in the US card industry in years, this sees Capital One acquire its own network in Discover, which could ultimately put it into a position to rival Visa and Mastercard. The full impact of this move is likely to take years to be felt, and how much it will impact the cross-border payments space remains to be seen, but we’ll be watching closely – along with most of the industry.

Beyond this, one of the most interesting things about this quarter’s M&A were how international they were, with acquisitions occurring across multiple countries, including France (Purse), Nigeria (Carbon) and Australia (Fat Zebra). 

Capabilities were also critical motivations for acquisitions, with AI in particular playing a role in two of the deals. Expect to see more mention of the technology in M&A announced over the course of the year – particularly given the rising interest in AI that we’ve already seen in payments.

Kicking off Q2, Canada-based Nuvei announced this week that it is set to be acquired by Advent International in an estimated $6.3bn deal that will take the company private. The deal is expected to close in late 2024 or Q1 2025. Having processed $200bn in volume in 2023, Nuvei’s acquisition could have a considerable impact on payments and reflects a similar move by MoneyGram last year. 

While we are long past the era of easy money, there are still companies attracting investment, with many startups reporting that they are now having to show much stronger, shorter paths to profitability than was expected a few years ago. The amounts being raised this quarter were fairly modest sums for the most part, although the areas of focus ranged significantly, with players across both consumer and B2B applications. 

However, what is notable is how international the companies who raised funds this quarter are, and in particular how many are focused on emerging markets. Two of the above are based in the Middle East – Kema (UAE) and Karty (Qatar) – and a further two are based in Latin America: Pomelo (Argentina) and Bold (Colombia). Zone, meanwhile, is based in Nigeria.

With so many established players looking to emerging markets for growth, it’s perhaps no surprise that investors are doing the same. 

Which markets provide the biggest opportunities for my business?

Lucy Ingham

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Lucy is Head of Content & Editor-in-Chief at FXC Intelligence, overseeing all content and taking deep dives into the trends and data driving changes in payments. Before joining FXC Intelligence, Lucy worked as a technology journalist and editor, interviewing CEOs and major names across enterprise technology, including fintech. She has an MSc in Development Anthropology from Durham University.