PE HUB Wire Highlights, 11.4.19

Silver Lake said to seek stake in NY Knicks, Rangers; Rapyd rejects PE; Why Goldman is pushing into the middle market

Morning, Hubsters! I have returned from Money20/20. I got back last Thursday but had some tech issues (i.e. my laptop blew up) which delayed my return as your morning MC. What did I miss?

One of the best meetings I had at Money20/20 was with the always interesting Arik Shtilman, co-founder and CEO of Rapyd. The London fintech helps businesses and customers get paid however they choose. Rapyd integrates local payment methods like bank transfers, e-wallets and cash into digital applications like API. Rapyd has raised $155 million in total, including $100 million in October in a round led by Oak HC/FTTiger GlobalGeneral Catalyst and Stripe also participated.

Six different private equity firms, including TPG Growth, wanted to invest in Rapyd’s most recent round but were denied, Shtilman said. Why? Private equity is all about cost margins and profitability, Shtilman said, while venture capital is about growth and marketshare. “We still have lots of marketshare we want to make…We know we can grow profitability whenever we want,” he said.

For Rapyd, it’s too early for a private equity investment, Shtilman said. Rapyd right now prefers venture capital money over private equity but “circumstances might change,” he said. PE can offer financing and other sophisticated options like stock shares. “We might have the flexibility to do other things,” he said.

He declined to comment on rumors Rapyd is looking to buy. Up for consideration are companies in card processing, card issuing, compliance and even aqui-hires, I’m hearing. Expect something to happen in Q1 20201.

Interestingly, Shtilman said the WeWork debacle has brought some sanity to VC valuations. Before the WeWork downfall, investors were putting out high offers to compete with SoftBank, he said. Now, VCs understand that SoftBank might make mistakes, he said. Rapyd remains unaffected by all the talk. Shtilman said on the flight from San Francisco to Las Vegas, he received two offers. “When you are good, everyone wants to invest,” he said.