Papaya Global buys Azimo for $150M – $200M to expand its payroll into more markets – MovieUpdates

Six months after raising $250 million, Papaya Global makes a major acquisition to expand its cloud-based HR and payroll platform globally on the heels of a big wave of remote working† Israeli startup acquires Azimo – the London-based money transfer company that owns Facebook ever tried to buy to advance its own remittance efforts — a deal that will see Papaya Global expand into more markets and launch more services, such as instant payroll.

The terms of the acquisition are not officially being disclosed, but a source close to companies tells me the deal was between $150 million and $200 million, a figure others seem to have reported as well. Papaya will acquire the entire company upon closing of the deal, including all of Azimo’s employees, the company said.

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

Azimo, meanwhile, has been backed by investors including Rakuten and Greycroft, and competes with companies like Wise (FKA TransferWise). Both companies were on a shortlist that Facebook used several years ago when it first began considering a move to money transfer services (a service it now offers).

The deal will help Papaya Global on two levels.

First, it will help the company expand its geographic footprint: Azimo currently has payment licenses in the UK, Netherlands, Canada, Australia and Hong Kong and operates a payment network in more than 160 countries, while Papaya Global (not to be confused with the other fintech called Papaya) which was operating services in 150 countries just before the deal, Eynat Guez, Papaya Global CEO and co-founder, told MovieUpdates.

Second, it will help Papaya Global expand its services. These include not only faster (immediate) payroll payment, but potentially a much wider selection of remittance services for people who work in one country but have family or others who want to pay them in another. In the past, those individuals may have used other services like Wise (or Azimo) to handle those payments; now Papaya Global can keep them on their own network (thus capturing the commissions and exchange fees) around those transactions.

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

It also capitalizes on a strategy that Papaya Global has been pursuing for some time to provide an all-in-one, end-to-end service to its customers – which not only consists of finding and ultimately hiring people in other countries. markets (whether they are freelancers or full-time or something in between), but increasingly services for those employees themselves.

“Pay payments that are made easy, regardless of geographic location, set us apart from other technology providers, and this acquisition will enable companies to make instant payments to their global teams,” Guez said in a statement. “Azimo’s global digital payment network, multiple payment licenses and deep fintech expertise will also enable us to build new payroll-related services for our corporate clients and their employees.”

For Azimo, the company told us in 2019 that it was profitable, and that was the last year it also raised equity. (A €20 million/$22 million injection in 2020 from the European Investment Bank came in the form of debt.) But that also meant that the company, which competed with companies like Wise, may not have scaled as much as it could have. would have had it taken a different funding trajectory, particularly in these recent pandemic years, which saw strong demand in the remittance market. PitchBook estimates the valuation in 2019 was a modest $136 million.

In addition, there is a long-term trend of consolidation in the market – a trend that will continue for years to come, given how fragmented the remittance market is today and how thin the margins are for those players who don’t scale. Linking his star to Papaya Global and a wider range of services that includes HR and payroll is one way to boost the company in a way that may have been more challenging for Azimo in itself.

“Combining Azimo’s resources and expertise with an emerging global leader in enabling remote work, such as Papaya, will enable them to deliver even more value for their corporate clients, especially those who increasingly pay and manage remote workers,” Azimo chairman and founder Michael Kent said in a statement. †

One of the reasons the companies aren’t talking about the sale price publicly is that the deal isn’t fully closed yet: regulatory approvals are needed in their respective markets, so they’ll continue to operate independently until they’re reached.

Updated the total number of countries currently served by Papaya Global, 150 (not 140).

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