BILL Catches Attention of Activist Hedge Fund Elliott Management

Hedge fund Elliott Management has reportedly purchased a large stake in payments automation company BILL.

That’s according to a report Tuesday (Sept. 9) by the Financial Times (FT), which says the activist fund is betting that BILL could be the latest in a string of payment company takeovers.

Elliott’s stake is at least 5%, the report said, citing sources familiar with the matter.

BILL, which automates payments for small and medium-sized businesses (SMBs) and processes upwards of $300 billion in transactions each year, was valued at $34 billion at its peak in 2021. However, the FT report said, its shares are down 85% from their high, rising 5.1% in after-market trading following the report on Elliott’s stake.

The FT notes that rival payments companies have become takeover targets as buyers capitalizing on reduced valuations. For example, Coupa and AvidXchange were taken private by Thoma Bravo and TPG in deals worth a respective $8 billion and $2.2 billion, while Melio was sold for up to $3 billion earlier this year.

BILL, the FT report added, has said it is expanding its customer base into larger companies that can deliver more reliable cash flows while trying to boost fees from each transaction.

“While BILL’s growth trajectory remains solid, the B2B FinTech space is becoming increasingly competitive. Incumbents like Intuit QuickBooks, PayPal and American Express, as well as newer players such as Ramp and Brex, are targeting SMBs with financial automation solutions, payments infrastructure and embedded finance products,” PYMNTS wrote earlier this year.

BILL’s differentiation, its executives said during an earnings call this winter, stems from its integrated approach, providing a suite that spans accounts payable (AP), accounts receivable (AR), spend management and expense tracking.

Unlike traditional payment processors, BILL bills itself as an end-to-end financial workflow enabler, making sure businesses can automate and optimize cash flow with minimal friction.

PYMNTS Intelligence research has found that SMBs are harnessing technologies like AR automation to enhance their efficiency, speed and accuracy and remain competitive.

With AR automation, these companies can optimize their cash flow management, reduce their days sales outstanding, bolster their processing speed and minimize errors, according to the PYMNTS Intelligence report “How Automations Reduce Receivables Delays.”