US payments and billings software company Bill Holdings (NYSE: BILL) is in advanced talks to acquire Israeli digital payment solutions company Melio, "Bloomberg" reports. The report adds that Bill Holdings (parent company of Bill.com) will pay $1.95 billion for the Israeli fintech company in a cash and shares deal that could be closed before the end of the week.
The report sent Bill Holdings share price down 11% in after-hours trading on Wall Street. The company has a market cap of $6.6 billion.
Melio has raised $517 million to date from a long list of investors including Accel, Bessemer, Gerneral Catalyst, Corner Capital and Aleph as well as major funds like Tiger Global, and Coatue, which invested in 2021 and have since sustained major losses.
A fall of more than half its valuation within two years
In its most recent financing round in September 2021, Melio raised $250 million, at a valuation of $4 billion (after money), according to PitchBook, so the potential sale would see the company lose more than half of its valuation in two years. Bill Holdings has also seen its valuation cut in half from $12 billion in 2021 to $6 billion today.
At the end of 2022, Melio CEO Matan Bar proudly told "Globes" about its ability to compete with its rival Bill.com. "At Bill.com the emphasis is on creating automation that saves time in transferring payments," explains Bar. "The main value that Melio provides is assistance to businesses in protecting cash flow. Melio has developed a system for transferring payments between small businesses in the US, which synchronizes the payment in the business's systems and allows postponement or spreading payments, with suppliers to that business receiving their money on time."
Melio was founded in 2018 by Bar, CTO Ilan Atias, and Ziv Paz, who left the company in 2021.
Melio declined to comment on the report.
Published by Globes, Israel business news - en.globes.co.il - on November 9, 2023.
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