Plastiq’s SPAC Deal Brings SMB’s Digital B2B Payments Shift to Wall Street

The digital shift in B2B — and specifically the way small and midsized businesses (SMBs) pay and are paid — now comes full force to Wall Street.

To that end, Plastiq Inc., the B2B payment platform focused on SMBs, said it had entered into an agreement to merge with Colonnade Acquisition Corp. II and then list its shares.

In terms of mechanics, according to the Thursday (Aug. 4) announcement, the implied estimated enterprise value of approximately $480 million at closing, which in turn equates to 6.4x forecasted net revenues of $75 million, and roughly 4.6x the forecasted $100 million in sales projected for next year.

We mention those numbers to give a sense of the growth that may lie ahead for the platform model that seeks to transform commercial payments. A projected surge of 33% for the top line even in a volatile macro environment is nothing to take lightly; beyond that metric, the release noted that there is a $9 trillion addressable market opportunity in the United States alone.

The shift, of course, is one that moves SMBs onto payments platforms and away from paper checks and invoices and can also help lower the fees that accompany the transactions themselves. Payments choice across wire, ACH and bank transfers can help unlock the trillions of dollars that are frozen in accounts receivables on any given day.

Automation as a Goal

Delving into the investor presentations filed with the SEC, we find that the overall goal is one that seeks to automate payables and receivables activities. The filing details a projected $4 billion in card and short-term financing volume in 2023, which in turn translates to a 39% CAGR. That volume would be tied to more than 1 million transactions expected next year.

That’s a small bite (well less than 1%) of the $370 billion in estimated SMB spend on invoicing and payments functions. The filing goes on to note PYMNTS’ own findings, in collaboration with Plastiq, that  72% of AP/AR executives are highly interested in using an all-in-one payment solution for B2B transactions.

Separate PYMNTS/Plastiq research has found among the most prevalent pain points is manual invoice review, which is cited by the greatest share of SMBs as a problem that they experience when making payments to suppliers.

Read more: Small Businesses Drowning Under Invoice Complexity

With details on Plastiq’s most recent quarter per the investor presentation, there are more than 195,000 payers using Plastiq and more than 200,000 suppliers connected to Plastiq across 50 countries and more than 20 currencies. Card volume growth was more than 66% year over year. Looking ahead, the company will be deploying the capital from the merger/listing into scaling current and new product offerings including buy now, pay later and SaaS.