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Tipalti raises $270 Million

Tipalti, once a fintech unicorn, is now nearing decacorn status.

The company, which automates accounts payables for mid-market companies, announced that it has raised $270 million in a Series F funding round that values the company at $8.3 billion. That’s up from a $2 billion valuation at the time of its $150 million Series E round in October of 2020.

In a nutshell, Tipalti uses artificial intelligence to help businesses manage suppliers, invoices, purchase orders, tax compliance, payments and billing and other accounting services from a single cloud platform. It claims to reduce companies’ operational workload by 80% by giving them the ability to pay partners and vendors “within minutes.”

As mentioned above, the company is focused on mid-market businesses, which are defined as those with revenues between $10 million and $1 billion. In the U.S. alone, mid-market companies account for more than a third of employment and about 40% of GDP.  Another large player in the space, Bill.com, is focused more on SMBs. That company went public in December 2019 and is currently trading at $254.76, significantly higher than the $22 a share it priced its shares at the time of its IPO.

“I think the market has a proper appreciation for the size of the market opportunity we’re facing,” CEO and co-founder Chen Amit said. “Our multiples over the last 12 months have increased because of that new appreciation.”

G Squared led Tipalti’s latest round, which also included “significant” investments from new backers Marshall Wace as well as funds and accounts managed by Counterpoint Global (Morgan Stanley), in addition to current investors Zeev Ventures, Durable Capital Partners, 01 Advisors and others. The financing brings the company’s total raised since its 2010 inception to $550 million.

Tipalti’s new valuation — more than quadruple that of its last — catapults the San Mateo, California-based startup to among the most valuable private fintech companies in the world, according to CB Insights.

So what has it done to warrant such a jump? A few things, according to Amit.

For one, it currently processes more than $30 billion in total annual payments volume — growing 120% year over year. It also recently passed the 2,000 customer mark. Those customers include Roblox, Amazon Twitch, GoDaddy, Roku, WordPress.com and ZipRecruiter, among others.

For some context, at the time of its Series E raise in October 2020, Tipalti said it had seen transaction volume on its platform balloon to $12 billion, up 80% from the year prior. It then had some 1,000 customers on its books.

Also this year, Tipalti opened new offices in London, Plano, Texas, and Toronto, Ontario, and has grown to 720 employees worldwide compared to 350 last year. It also launched “enhanced capabilities,” including the acquisition and integration of cloud procurement solutions provider Approve.com, enhanced multi-entity AP capabilities, virtual cards, mobile and added new integrations with complimentary financial tech stack providers such as expense management companies. 

But that’s just the beginning, according to Amit.

“This latest investment will enable Tipalti to add more to our product lines and capabilities in the next 18 months than we have over the past 10 years combined,” he said. “The broader challenge of financial operations for high growth and mid-market companies encompasses many problems and challenges they have and that creates more opportunity for us to monetize.”

Tipalti will also use its new capital in part on customer operations, as well as toward a global expansion. It also plans to hire across its product, engineer and sales and marketing teams.

“We expect to double our go-to-market team next year,” Amit told TechCrunch. “The addressable market we have is around 700,000 companies with very little penetration between us and the few other players in the market. So they want to reach out to more of these prospects.”

Larry Aschebrook, founder and managing partner of G Squared, said in a written statement that his firm believes that “Tipalti is reshaping how businesses manage their financial operations.”

“Their growth and industry-leading retention rates are evidence that they are on a mission to solve important challenges for their customers,” Aschebrook added. “We see a huge opportunity in the target market that is largely underserved currently.”

In his view, Tipalti has approached a complex and often low-tech set of essential business processes and “meticulously crafted a solution with simplicity at its core.”

Tipalti seems to be Global, Scalable Payables Automation for High-Velocity Companies. I’m sure the company will continue to prosper in its journey ahead. My best wishes to the team of Tipalti.

Shishir Gupta, Founder and CEO, of StartupLanes

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