May 26, 2022

Six months after raising $250 million, Papaya Global has made a major acquisition to expand its cloud-based HR and payroll platform globally. On the heels of the huge wave of remote worki Israeli startup acquires London-based money transfer company Azimo, which owns Facebook ever tried to buy To promote their own money transfers – a deal that will expand Papaya Global to other markets and launch more services such as instant payroll.

The terms of the acquisition have not been officially disclosed, but a source close to the companies told me that the deal is between $150 million and $200 million, which others seem to have reported. The company said Papaya will acquire the entire company, including all Azimo employees, once the deal closes.

For some context, Papaya Global, backed by the likes of Insight Partners and Tiger Global, was valued at $3.7 billion in its latest funding round in September 2021 after growing 300% in annual revenue over the past three years.

Meanwhile, Azimo is backed by investors including Rakuten and Greycroft and competes with companies like Wise (FKA TransferWise). Both companies were on the shortlist that Facebook used a few years ago when it first started considering money transfer services (a service that’s on offer now).

This deal will help Papaya Global on two levels.

First, it will help the company expand its geographic footprint: Azimo currently holds payment licenses in the UK, the Netherlands, Canada, Australia and Hong Kong and operates payment networks in over 160 countries, while Papaya Global (not to be confused with the other a fintech service called Papaya), which operated in 140 countries prior to this deal.

Secondly, it will help Papaya Global expand its services. These include not only fast (instant) wage payments, but a potentially wider choice of money transfer services for people who work in one country but have families or others who want to pay them in another. In the past, these people may have used other services such as Wise (or Azimo) to process these payments; Now Papaya Global can place them on its network (thus earning commissions and exchange fees) around these transactions.

“Papaya customers will greatly benefit from our years of experience building payment technology and operating as a regulated payment company,” said Azimo CEO Richard Ambrose.

It also uses a strategy that Papaya Global has been aiming for for some time to provide its clients with a full service that includes not only recruiting people in other markets, but ultimately hiring people (whether freelancers, in-house or something in between), but faster services for those employees themselves.

Inat Gez, CEO and co-founder of Papaya Global, said in a statement: “PayPal payments, regardless of geographic location, sets us apart from other technology providers and enables buying companies to make instant payments to their global teams. “Azimo’s global digital payment network, multiple payment licenses, and deep fintech expertise will also enable us to create new payroll-related services for our corporate clients and their employees.”

As for Azimo, the company told us in 2019 that it was profitable and that was the last year it raised capital. (A €20 million/$22 million injection from the European Investment Bank in 2020 came in the form of a loan.) But it also meant that a company that competed with companies like Wise could have as much money as possible. don’t scale that much. Had he followed a different funding trajectory, especially in recent years of the pandemic, with strong demand in the remittance market. Pitchbook estimates the company’s 2019 valuation was a modest $136 million.

In addition, the market is seeing a long-term trend towards consolidation, a trend that is likely to continue in the coming years given how fragmented the remittance market is today and how small margins are for players that do not scale. Connecting your star to Papaya Global and a wide range of services, including HR and payroll, is one way to promote the company that can in itself be more challenging for Azimo.

“Combining Azimo’s resources and expertise with a new global leader in remote work like Papaya will enable them to deliver even greater value to their corporate clients, especially those who increasingly pay and manage remote workers,” said Michael, President and Founder of Azimo. Kent in a statement. I

One of the reasons companies don’t speak publicly about the sale price is because the deal isn’t quite closed yet: Regulatory approvals are needed in their respective markets, so they won’t until they’ve been achieved. regardless.

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