Taylor Lauber, president and chief strategy officer of Shift4, speaks with Acuris Capital Intelligence about the company’s acquisition strategy and the challenges of being a payments processor for the pandemic’s hardest-hit industries.

Interview by Rachel Stone

Q. Shift4 seems to have weathered the recent sell-off of fintech stocks. What’s the secret to your success?

We certainly weren’t immune to the sell-off. If you look at the peak in our stock, it was above US$100 a share; we’re down at US$60 now. After spending a lot of time talking to stakeholders, it became clear in the fall that, within the payments and fintech space, the number of companies going public was dramatically confusing the investment community.

Uncertainty around the [economic] recovery, a new COVID-19 variant and geopolitical risk all layered into the uncertainty of the landscape, and I think caused a pullback.

Now you’re seeing the market doing what it should, which is starting to differentiate between true winners and losers. I think multiples will reach their logical conclusion. When you had as many companies enter the market as quickly as they did, it’s not surprising to me that investors needed to pause and re-evaluate what was going on.

Q. Are multiples changing?

I won’t say that multiples have changed meaningfully [in the private market], but a willingness to structure transactions in the spirit of getting something done has certainly become more of the conversation.

Six months ago, you’d be laughed at for offering anything below 10x revenue for a business. Today, you can have much more constructive conversations about what your business is like now and where you think it’s going to be tomorrow, and can we mutually agree on the economic paths to get there? As opposed to hearing, “You need to pay me now for what I’m going to deliver one, two and three years from now.”

Q. Shift4 announced two acquisitions in March (payments provider Finaro and cryptocurrency fundraising specialists The Giving Block)—can we expect any more buys this year?

The market often dictates the most attractive time for M&A, more so than your objectives as a business.

We have roughly US$1 billion in cash. We’re about 3x net levered when considering the Finaro transaction. We offered equity at levels that we were less than thrilled about, to preserve some ability to do more M&A. Finaro is one piece of a much larger strategic game plan. So yes, I do expect more M&A this year.

Q. Shift4 serves industries hit particularly hard by COVID-19-related regulations. How is the company positioning itself to withstand future surges?

Throughout our history, we have looked for ways to eliminate pain points for merchants. In the industries and the size of merchants we serve, these pain points are abundant. Almost irrespective of some of the toughest impacts at a macro level, we found ways to deliver value to merchants and bring more merchants onto the platform.

During 2020, we grew our payment volume by double digits, despite serving mostly hotels and restaurants. There were only three months in 2020 in which we saw lower payment volumes than the year before.

In preparing for the future, it’s two things. We would be foolish to say that we didn’t wish we had more diversification throughout the pandemic; we do, despite our success. We also need to continue to find tools to drive merchant adoption and continue to stay nimble, so we can pivot our playbook when the world throws something funky at us.

Bit of background: Taylor Lauber is president and chief strategy officer of Shift4, responsible for all aspects of growth, including overseeing product development, strategic partnerships and corporate development/investments. Prior to joining the company, he worked at Blackstone in a variety of strategy roles, most recently as the COO and lead portfolio manager for Blackstone Total Alternatives Solutions funds. Prior to Blackstone, he was a private banker at Merrill Lynch where he advised Fortune 500 companies on capital markets transactions. 

This interview has been edited for length and clarity.