The Boston-based digital payments company Flywire made its public market debut Wednesday on the Nasdaq exchange, after raising $250 million in an initial public offering. Flywire’s stock ended its first day of trading up more than 46 percent to close at $35.10, and its valuation is north of $3 billion.
The company was founded in 2009 by a management consultant from Spain, Iker Marcaide, who had enrolled at MIT’s Sloan School of Management and discovered just how challenging it was to make sure that his tuition payments were delivered across international borders — on time. Mike Massaro joined the company in 2013, and now serves as its chief executive.
I spoke with Massaro just before he and other Flywire employees rang the Nasdaq opening bell in Times Square on Wednesday morning. For Massaro, it was the first time he’d seen many of his co-workers since the start of the pandemic. What follows is an edited transcript.
Many people are familiar with payment companies like Venmo or Square, but Flywire is a little different. What does the company do?
If you look at what has happened in retail and e-commerce, the average consumer is tapping and paying everywhere, and you have cardboard boxes showing up in record amounts. That transformation has never happened for other major parts of the economy. We focus on these high-value, high-stakes payments in other parts of the economy that have been poorly digitized — education payments, healthcare payments, travel payments, business-to-business. We have software, technology, and payment processing services.
Who were some of the early customers?
We started only in the US, and only within education. We had cross-border tuition payments, helping universities get paid from families around the world. Early on, it was a whole series of educational institutions in the US, like Cornell and Boston University.
Do consumers see the Flywire brand, or do they just look at it as paying a health care bill from a hospital, or a tuition bill from a university?
Think of it more as “Intel Inside” branding. Flywire empowers our clients to deliver great experiences. We don’t put our brand out in the forefront. But if you have a child going to a university, and you’re setting up an installment payment plan, our software is managing that entire workflow for the university, and engaging the payer, giving you payment statuses.
Flywire had a really strong first quarter of this year, with about $45 million in revenue, up about 36 percent from last year’s first quarter. Why was that? Are you in some ways being helped by work-from-home, or other dynamics related to the pandemic?
The last 14-plus months have been quite an experience. Our team is definitely thriving even in the face of not being able to get together. We’ve always been global; we have 40 nationalities, so the team has always collaborated quite well.
Our focus was, how do we help [our customers] address changes to their business? If you think about hospitals saving lives ― they didn’t have the time and attention to focus on billing. Our team could help them make sure they were going digital – rather than mailing bills and accepting checks.
So part of what happened was a stronger desire for these schools and companies to digitize?
Everybody was under pressure, and no one was increasing staff. [Our customers] needed to do more with technology. They had projects [related to billing and payments that] they were pushing off to a future date, [which] became more urgent. Our travel clients had to shift their business, to make sure they were getting more domestic travelers.
We also signed on 400-plus new clients last year, and we did that without having any in-person selling happen.
Do you think face-to-face selling will come back?
There’s going to be a return to some level in the middle. Hopping on an airplane to go to the West Coast for a one-hour meeting? Zoom will be there for that. But I don’t think [in-person sales, or trips to trade shows and conferences] will be eliminated altogether; people have to know who they’re buying from.
What was the run-up to the initial public offering like? Were there any trips or in-person meetings, or were you sitting in your house and doing a lot of Zoom meetings?
The last four or five months, I’ve been in different places ― my home in Massachusetts, a place in Maine, doing the same type of virtual stuff everyone is doing. This last week, I’ve been in New York, taking some in-person meetings. It feels good to see our team again; the last time our large executive team was together was 15 months ago, and now we’re seeing each other going public in New York.
The last time you saw most of your co-workers was early last year?
Just before the pandemic, we had gotten together in Chicago. I remember getting on the airplane in early March, and there were about 20 people on the flight to O’Hare. I’ve had outdoor walks or lunches with one or two people over time. But to see the whole team together in New York last night was pretty special.
Was there anything that felt like a pre-initial public offering “road show” for you, where CEOs would typically travel around to meet with institutional investors to talk about the company?
It was just rapid-fire Zoom ― probably equally intense, but in a different way. It was eight one-hour Zooms a day, for about six days. But it avoided having to hop on a plane and bounce around to different cities.
Why did Flywire opt to go public the “old fashioned” way, versus what some people say can be a faster and simpler approach — getting acquired by a SPAC (a special purpose acquisition company that’s already publicly traded)?
We felt that a traditional IPO was the right way to go. It gave us an opportunity to meet those public market investors and tell our story. We are fortunate to have a great board with Fidelity, Bain, Spark Capital, the sovereign wealth fund of Singapore.
What have you learned about managing people in this work-from-home period, as you’ve tried to keep the company growing while many employees have probably been very distracted by having kids at home, sub-optimal workspaces, challenges collaborating?
We learned that people can do amazing things in the face of adversity – which we’ve always known. We launched major hospitals and universities [on Flywire’s payments platform], when normally we would’ve gone on site for these deployments. The team just figured it out. I learned to empower the team more. They’ll execute. They’ll deliver.
The next thing is [about] helping people bring their full self to work. It’s important to help people balance work and personal lives – but to see everything get collided together during the pandemic, we needed to do more to support our teams. We launched a new wellness initiative, helping [employees] who lost family members, or were dealing with different kinds of stresses, having their lives turned upside-down. Some people would say, “That’s not the company’s job.” To me, it’s critical. We’ve always done those things, but we just doubled and tripled down on it. It helps differentiate us.