Fintech acquisition targets in 2023, according to industry experts

CFO stack (cost management, next generation FP&A)

Potential sellers: Zip ($1.2 billion valuation in May 2022, per TechCrunch); Tradeshift ($2 billion plus by December 2021, per TechCrunch); Melio ($4 billion in September 2021, per Reuters); Ramp ($8.1 billion in March 2022, per Reuters)

Potential buyers: BILL; Anaplan; Adaptive; Coupa; Duck Creek; Avalara

What it is: The CFO stack is a set of tools that CFOs use to manage the financial operations of a company.

Why it’s on the market: Especially within the CFO stack, technology related to invoicing and financial planning and analysis (FP&A) is up for grabs, according to the partner in the California firm. Existing leaders in the market are all potential buyers.

“Whether it’s Bill.com, Anaplan or Adaptive — any of these types of businesses — and even some of the expense management platforms are potential buyers,” the partner said. “These are software companies that, relatively speaking, have had better value than ‘fintechs’ have.”

Private equity-backed players in the space are also poised to grow through acquisitions of smaller players, F-Prime Capital’s managing partner David Jegen told Insider.

“Over the past year, I have expected PE investors to take advantage of the public market cap correction to buy scaled fintech players, and then use them as platforms to buy even more private companies,” Jegen said.

This so-called “roll-up strategy” is mature in fintech, Jegen said, because large PE firms have been active in the area.

In 2022, Thoma Bravo bought Coupa for $8 billion and Anaplan for $10 billion; while Vista Equity Partners acquired Avalara for $8 billion and just completed its acquisition of Duck Creek for $2.6 billion. All four acquired companies will become acquirers of other private companies, Jegen predicted.

For example, Coupa plays in the expense management space, which has received more than $30 billion in private investment over the past five years and produced dozens of startups, Jegen said.

It would make sense for Coupa to expand its suite of offerings by acquiring private companies operating in interesting, adjacent areas, he said. The corporate card space with Ramp, accounts payable workflow via Melio and procurement via Tradeshift and Zip provide attractive targets, Jegen added.