The Inside Story – How Papaya Raised $45 Million
Alex Margolin| Oct 31, 2019
When we envisioned Papaya three years ago, our dream was to provide a simple global workforce solution without compromising on compliance, privacy, and most of all, a great experience for our clients and their employees.
We wanted to create a truly SaaS solution with three main objectives: to serve the needs of companies at all stages of growth, to support all types of workers (EoR, payroll and contractors) and to enable global payroll and payments for 100 countries.
I remember pitching Papaya to our first global clients. I could see a spark in their eyes – we had solved a genuine pain point they faced every month.
Then I started pitching our solution to investors. They didn’t get it. Some called it a “niche.” Many didn’t believe the pain points we solved were real. A few were honest enough to tell me that payroll is simply not exciting enough for them.
The Inside Story, Part One – Insight Partners
I remember the first email we received from Insight Partners. It was in September 2017:
Reaching out on behalf of Insight Venture Partners. Would love to personally introduce myself and hear how Papaya Global has been growing. Let me know a date/time that works to catch up.
The message caught me by surprise. Three months earlier, I had given birth to my first child and was still trying to manage the craziness of raising a baby while running a startup. It didn’t seem possible that a fund that size would find us and reach out directly.
A week later, we were demonstrating our platform on a call to the Insight team with Jeff Horing. The whole time, my baby was screaming in the background, but I remember Jeff summing up the meeting: “I love the story, but it is too early for us. Keep scaling and we’ll invest.”
Two years later – and three months after I gave birth to my second child – we signed a term sheet for our series A financing round led by Insight Partners.
What happened during those two years? We scaled, we grew, we automated, and we invested heavily in our product, technology, and offering. We tripled the size of our team, the number of clients, and our revenues year-over-year. We onboarded amazing clients such as GitHub, Rubrik, CyberArk, Kong, Yubico, Robin Hood, Sonder, Deezer, Scoot, and many more.
And we kept in very close touch with the Insight team, which prudently followed us quarter-by-quarter and tracked our growth. This was always more than just, “how are your numbers?” They never failed to add, “how can we assist you?“ as well.
Inside Story, Part Two – Bessemer
Our conversation with Bessemer started with a short introductory email in late July:
It’s been a long time – hope things are good!
I want to introduce you to my SF-based partner Talia. She is looking at your space extensively and will be happy to speak with you.
Please feel free to coordinate directly with each other.
I’m always happy to pitch Papaya’s story, but I could tell that Talia already had a deep understanding the global workforce arena. Clearly, she could teach us some new things!
Our first conversation led to another, and a platform demo. At every stage, we were repeatedly impressed by Talia’s vast knowledge and industry understanding. For me, the opportunity to work with someone so excited our value proposition was simply irresistible.
At this point, we were lucky enough to be at a stage where we could choose our investors from an amazing list of VC’s. There were no bad choices. But choosing Insight Partners to lead this round was the natural choice, especially after our long relationship and their unwavering enthusiasm for what we do. Our decision to choose Bessemer to join was the next natural choice for us in light of the strong impression they left on all of us.
A Time of New Beginnings
When I look back on the principles that helped Papaya grow so quickly, I know that our commitment to helping companies in their global expansion – whether they are clients or not – has been one of the most important. That’s why we share knowledge, common practices, and benchmarks with all companies looking to grow globally and manage their remote workforce.
I’m a “people person” and my experience has taught me that value comes from being truly motivated to help someone else succeed. The last two years have helped us see that we share the same values as Insight & Bessemer.
Last month, we in Israel celebrated the Jewish New Year – “Rosh Hashana.” While on December 31st we close the financial year and see how we fared budget-wise, on Rosh Hashana we plant seeds for the coming year as individuals, as a team, and as a company. This year, minutes before we started the new year – we signed our Series A financing round to the amount of $45M, led by Insight Partners, with the participation of Bessemer, New Era Capital Partners and Dynamic Loop Capital. For me, it’s a clear sign of “Shana Tova” – a good year.
Welcome Teddie and Brad from insight and Talia and Ariel from Bessemer to Papaya! I’m looking forward to the years ahead. This is just the beginning of an amazing journey!
Some important thank-yous and recognition.
Thanks to the amazing people at Papaya who make the company what it is.
Thanks also to the fantastic team that leads the Women Founders Forum – Sivan Shamri Dahan, Merav Weinryb, and Irit Habshush Kahan who support amazing women founders in Israel and have been there with us from the very first steps of the company.
Big thanks to our lawyer and great advisor Shmulik Atias from GKS Law Offices, who is always available for anything, any time of day.
And to Assaf Wand, a great entrepreneur whose willingness to help is as big as a Hippo!!!