Following the loss of a major contract, Payfare Inc (TSX: PAY) has indicated it has launched a strategic review process. The process has been undertaken as a means to “enhance value” following the company losing a service contract with Doordash.

The company has stated that the undertaking of the strategic review is due to the company having a “robust pipeline of potential new opportunities,” for which it wants to “alleviate concentration risk”.

The review process is said to include the assessment of strategic alternatives, including a potential sale or business combination, with there being no set deadline or timeline for the process. Further comments on the matter will also not be made until a transaction has been approved by the firm and its board of directors.

READ: Payfare: Eight Capital Estimates DoorDash Accounts For As Much As 80% Of Revenue

Payfare meanwhile indicated it remains well funded, with over $100 million in cash, cash equivalents, and investments, which can be used to fund ongoing operations and new initiatives. The company has stated that it will right size its operations to reflect the mid-term reduction in revenues, suggesting layoffs are coming at the company.

The strategic review follows the company losing a contract with DoorDash that was set to renew, but will now expire, in early 2025. Payfare has not directly stated what portion of its revenues are attributable to the services agreement with DoorDash, but estimates by analysts suggest as much as 80% of its annual revenues are derived from that agreement.

Payfare last traded at $2.05 on the TSX.

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