B2B Payments

Tipalti Closes $30 Million Series C Funding Round To Build Out R&D

AP

As companies grow and go global, manually processing payments and accounts payable (AP) can be a hassle. A chief financial officer and his or her team can not only spend hours managing B2B payment operations, but employees can also introduce risk into every step along the way.

Enter Tipalti, a global payables automation software company that includes all phases of the payments workflow in a cloud-based platform, which includes steps from supplier onboarding to cross-border payments and AP reporting.

Through its platform, Tipalti is typically able to automate 80 percent of a company’s AP and cross-border payments workload. With those time savings, a company’s finance team can tend to other tasks — such as improving a company’s profitability or scaling the business globally.

“It is quite clear that it’s time for the payables operation to take advantage of automation,” said Oren Zeev, founding partner of ‎Zeev Ventures and chairman and co-founder of Tipalti. “Organizations should not be running finance operations manually, but rather automate this workflow to reduce short and long-term risk and costs and ultimately free resources for high-value initiatives.”

After all, the word “tipalti” means, “we took care of it,” and that’s what the San Mateo, California, startup aims to do by automating the accounts payable and payments cash flow.

 

Sub-Brands

Software that manages invoices has existed for decades, but Tipalti takes an alternate approach: Its offering automatically processes the payments.

“If you don’t remit payments, someone else has to — probably manually — which is what causes payment errors and problems in reconciliation,” Chen Amit, Tipalti’s CEO, told PYMNTS.com. “We started with the most difficult piece first: payments, and cross-border payments at that.”

This feature could become helpful, particularly as companies grow and branch off into sub-brands serving different functions in different places — or countries. Those sub-brands may need to make separate reports and must be able to show entity-specific data during audits to demonstrate that no single entity is encountering disproportionate financial issues or fraud risks.

Some of those pieces include onboarding suppliers, reducing payment errors submitting reports and tax forms, following local rules and regulations, providing global payments reach and managing invoice versus non-invoice workflows. That can be a lot to handle even for organizations that only have a presence in one or two countries, let alone ones with many entities across many nations.

As a result, Tipalti lets acquired entities retain their own sub-brand beneath the larger umbrella through multi-entity capabilities. The feature not only centralizes cross-border payments: It gives brands local control too. And it’s a strategy for Tipalti’s expansion.

“Competent cross-border payments are central to maintaining that growth,” Amit said. “A large majority of our payments have to cross international lines, which makes us invaluable to create a centralized payables operation, providing global control and localized workflows.”

 

Early Payments

With growth also comes more suppliers. An average mid-level company that Tipalti works with has 5,000 suppliers, for example.

If a company wanted to make early payments — and receive a discount for making them — they might face a time-consuming process. In the past, companies and their suppliers would have had to sit down with the financial institution to set them up, a process that must be repeated for every supplier in the chain that wanted early payments.

But through Tipalti’s early payments — a one-click, no-negotiations process — suppliers get their payments instantly, and companies are rewarded with a discount for paying early.

Once Tipalti removed the accounts payable friction and made early payments a one-click, no-negotiations process, one startup saw the adoption rate climb to 15 percent. The program’s popularity continues to rise, as customers get their heads around it, Tipalti Chief Marketing Officer Robert Israch has said.

 

Funding

To help grow its business, Tipalti closed a $30 million Series C financing round led by Zeev Ventures. With that latest round, the company has raised more than $50 million to date. The company plans to use the latest funding to accelerate its product innovation. Zeev said it was an easy decision to continue investing in Tipalti with its latest round.

“It is extremely rare to have the opportunity to invest in a category leader,” Zeev said. “Tipalti is really changing the way B2B payments are being done, helping companies manage their cross-border payment, supplier and compliance operations.”

The round comes after the company closed a $14 million funding round led by SGVC in 2016, which followed a $13 million Series B round in 2014 led by Wicklow Capital.

With the latest round of funding, the company plans to build out its research and development (R&D), customer success and account management teams. It also plans to invest in growing its customer base and expanding its partner ecosystem.

Investors like the company because of its focus and its business model. “It’s proven very successful and scalable,” Amit said. “Because Tipalti is focusing heavily on the midmarket, it has designed a product from the ground to meet their complex, resource-constrained and fast-changing needs.”

Already, Tipalti processes over $4 billion in transactions annually across almost 2 million global suppliers. Its clients include Amazon, GoDaddy, Indeed, Roku and Twitter. And that roster could soon grow as companies seek to automate their accounts payable process.

“Tipalti is extremely well-positioned to take advantage of this movement,” Zeev said. “[The company] has only scratched the surface of what we’ve determined to be a $90 billion global market.”

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