While becoming a unicorn seems to be par for the course for Israeli tech startups these days, workforce management company Papaya Global still manages to stand out. The company is the only Israeli unicorn to be led by a female entrepreneur, its co-founder and CEO Eynat Guez. The company announced on Thursday that it has raised $100 million in series C funding, taking the company’s valuation over the $1 billion threshold.
The new funding round was led by GreenOaks Capital Partners and joined by IVP and Alkeon Capital, with participation from existing investors Insight Venture Partners, Scale Ventures, Bessemer Ventures, Dynamic Loop, New Era and Workday Ventures, Access Ventures, and Group 11.
The new investment follows Papaya’s $40 million series B round that was announced less than six months ago, bringing its total funding to $190 million. In addition to the $100 million in new funding, past backers invested an additional $20 million-$30 million in the purchase of shares from veteran investors and employees.
Guez, who doesn’t come from a technological background, founded Papaya Global in 2016 together with Ruben Drong (CPO), and Ofer Herman (CTO). It started out operating on a bootstrap model, relying largely on Guez’s experience from running RelocationSource, a leading company in the executive relocation sector.
Papaya’s SaaS software unifies all workforce management tasks under one platform – from onboarding through payroll and payments – in over 140 countries. Papaya’s team currently spans Tel Aviv, New York, Austin, London, Kiev, and Melbourne, with plans to triple in growth year-over-year in terms of clients, revenue, and employees globally.
Speaking with Calcalist, Guez said that becoming a unicorn was never her main agenda. “We are approached by investors on almost a daily basis. I ignore most of them because it takes up too much time. In this case, the leading investor turned to me after having conducted an in-depth market study. They told us that we were market leaders in our field and it was interesting to talk to them. It is well known that I like people who do their homework. I told them that we weren’t raising money and that I was a month ahead of having a baby. In the end, I agreed to hear their offer, which was a very good one, over and above the financial offer.”
“I am not seeking to maximize offers. I could have taken that route and reached an even higher valuation had I wanted to. I’m looking for people who are excited by what I do. It is important to remember that checks need to be covered. If you believe in a company and its price tag, that’s great. If you are benefitting from a bubble, that’s fine too. But always remember that you have to produce results and it can be a honey trap. One of my other investors helped me assess the investment and figure out what I need to do to meet the obligations.”
Guez is a veteran entrepreneur in the local market and expressed great concern over the market’s recent behavior. “The funding rounds are scary, the market is scary and it is not clear what the new standard we need to adjust to is or what price we will have to pay. At the end of the day though, I believe that most companies that raised a lot of capital have also experienced expedited growth so there is a causal relationship.”
Guez is also very aware that she stands out in the local scene, being the first woman founder whose company reached unicorn status and all while being pregnant and having a baby. “I signed the initial investment agreement two weeks after giving birth and I wasn’t certain it was the right thing for me to do. I decided, however, to go for it because it was the right move for the company and so I wouldn’t tell myself that I’m limited because of being a woman,” she said. Guez added that she didn’t tell anyone about her pregnancy and was able to hide it because everything was done over Zoom. She said she feels vindicated by proving that pregnancy was not a hindrance. “I hope that this is the start of a trend and that many more women-led unicorns will follow,” she said.
It should come as no surprise that Guez is currently flooded by offers of SPAC mergers, but she is adamantly against it. “I receive more SPAC offers than anything else. But it is not the right time for our company. We are still building up the company and have a lot left to do. We aren’t seeking an exit yet, it is completely off the table," she said. “I think SPACs are legitimate if the company is ready to go public and it can be a good shortcut to the public market, saving myself a year of gruntwork. The fact that anyone would be willing to take us public now is worrying because we are not ready for that yet and if I’d take it to our investors they would know that. The fact that I’m being approached for SPAC mergers is a sign of a bad trend.”
"Papaya Global has built a best-in-class solution to onboard new employees, automate payroll, and manage a global workforce through a single pane of glass. Both growing and established companies have dramatically changed their working practices in recent years, and Papaya has seen impressive growth as a result. We’re excited to continue supporting them as they seek to simplify an increasingly complex challenge for some of the world’s biggest companies," said Patrick Backhouse, Partner at Greenoaks Capital.