A Canadian financial technology firm has initiated a strategic review following the loss of its biggest customer.
Toronto’s Payfare, which powers instant access to banking solutions for workforces, announced this week that its Board of Directors has launched, alongside legal and financial advisors, “a comprehensive and thorough strategic review process to explore and evaluate a broad range of potential options for the Company to enhance value.”
A significant number of gig workers live paycheck to paycheck, with 78% facing challenges covering unexpected expenses, according to Payfare, whose services seek to alleviate financial strains by allowing workers faster access to their earnings through a digital banking platform. But Payfare may also soon be feeling its own form of financial strain.
The announcement from Payfare follows news that DoorDash, the fintech’s largest customer, would not renew its contract with the Ontario firm, negatively impacting a “substantial proportion of Payfare’s total revenues.”
Moving forward, Payfare will assess strategic alternatives that may include partnerships, investments, acquisitions, or even a merger. Shares in the company, which had been rising steadily for some time, plunged drastically overnight.
Despite the strategic review, the company emphasizes that the “foundation, funding, and execution of Payfare’s ongoing programs remain secure with a robust pipeline of potential new opportunities in the gig economy and EWA space.”
During the process, Payfare “remains focused on executing its current business strategy and will continue to provide industry-leading financial solutions for its clients and cardholders,” according to a statement from the fintech.
There is no deadline for the completion of the strategic review, Payfare’s leadership team noted, adding that it has “over $100 million in cash and cash equivalents.”
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