Navigating Turbulence in Business-to-Business Payment Collection amidst Adverse Conditions (Flywire)

Flywire, a leading player in the B2B payment solutions market, anticipates a significant increase in revenues over the next year, thanks to a variety of factors. The company expects a "slingshot effect" due to deferred business payments, new customers, and higher university enrollments, particularly from countries with stricter lockdown rules such as Australia, New Zealand, and Canada.

In 2020, approximately 95% of Flywire's revenue came from recurring revenue with existing enterprise customers. However, the company is now focusing its product expansion on the travel and business payments segments for 2021. This shift in focus comes as the education sector, which accounted for 65% of Flywire's business in 2020, continues to adapt to the challenges posed by the pandemic.

Many students opted to defer their studies to 2021, but those who continued their education did so remotely, keeping tuition fees unaffected. This, along with the academic year seeing some of Flywire's Covid-19 growth driven by 2019, has contributed to the company's impressive growth despite the pandemic. Flywire grew at a rate of 35-50% in 2020, positioning it as an attractive target for either the public markets or a strategic player.

Flywire originally focused on the accounts receivables side of B2B payments, while most competitors provide accounts payable solutions. This unique focus has helped the company carve out a strong market position in invoice processing. Financial technology companies like PayPal, Square (Block), or Adyen, as well as traditional payment processors such as Visa and Mastercard, could have been interested in merging with Flywire in 2021 due to its attractive growth potential and strong market position.

Mike, a representative of Flywire, mentioned that a venture-backed business has only three routes: fail, be acquired, or go public. Flywire's options are now down to just two of those options. The company has been working on developing new domestic payment solutions, marking a reverse growth path compared to most players and entering a more competitive segment.

Despite the travel industry being hit harder by the pandemic, it has shown resilience, with many shifting to domestic or regional travel. This shift could provide additional opportunities for Flywire to expand its services in the travel payments segment.

Cristina Topolnicki, who is mentioned in the article, is likely a key figure in Flywire's growth strategy. With clients from 32 countries, each market offering local product development opportunities such as local currency support, Flywire is well-positioned to capitalise on the global demand for B2B payment solutions.

As Flywire looks to the future, it seems clear that the company is poised for continued success. With its unique focus on accounts receivables, strong market position, and impressive growth, Flywire is undoubtedly a force to be reckoned with in the B2B payment solutions industry.