Payroll paytech company Papaya Global is on a hiring binge in the U.S., seeking to increase its employee headcount by about a third by yearend as it builds out new cross-border payroll payment capabilities.
The Israeli company, with about half of its clients headquartered in the U.S., aims to add between 50 and 70 U.S. employees to its current 180 stateside workers, Papaya CEO Eynat Guez said in an interview this week. Worldwide, it’s trying to add about 300 to its 750 overall headcount.
Papaya, which is backed by major venture capital firms including Sequoia Capital and Bessemer Venture Partners, has built out its cross-border payroll company by adding a payments capability this week.
While payroll companies abound, it’s a rarity for one to actually make the payments to employees globally, handling all the tax compliance and benefit detail complexities across borders, Guez said. Papaya didn’t offer that option either until its purchase this year of the London-based money transfer company Azimo, which added money transfer licenses to Papaya’s operations. In July, Papaya received regulatory approval of the merger, allowing it to launch the new services this week after a silent start-up in recent months.
“We are taking a very bold approach in saying that we can do that all over the world within 72 hours,” said Guez, who co-founded the company six years ago in 2016. She noted that in Europe, Papaya can sometimes deliver payments even faster, in less than two hours.
Papaya paid between $150 million and $200 million for the acquisition in March, according to TechCrunch, after raising $250 million last year. While a company may manage payroll payments domestically, it can tap Papaya for payments to employees in any or all of 160 countries.
“The payments piece is the biggest thing,” she said. “If you are looking at any other payroll company in the world none has a money transfer license.”
Attracting big-name clients
So far, Papaya clients include car-maker Toyota, tech giant Microsoft, e-commerce company Shopify and the video-streaming outlet Vimeo, a spokesperson for the company said.
The other half of Papaya’s clients are headquartered in Europe and the Middle East, Guez said. Worldwide, the clients have employee headcounts of anywhere from 500 to 55,000 employees. While it might seem that only large companies would need such international payroll services, she said increasingly smaller ones need them, too.
“Companies are becoming global on a much, much earlier basis,” she said. “Our clients are mid-market to large clients.”
The company’s software-as-a-service platform allows for easy startup within days, without third-party integrators, and lets clients buy the services in only countries they choose, Guez said. The Papaya system incorporates different classifications for payroll payments by country so it can receive payroll orders and disburse the payments accurately in different locales, Guez said.
“If you send it locally, it’s very easy to classify it as payroll — if you send it internationally, it’s very hard to classify something internationally as payroll so the bank will see it,” explained Guez, who said she has 20 years of payroll and global workforce experience.
Major rivals to battle
Still, Papaya has some big-time competition in the industry, like Roseland, New Jersey-based Automatic Data Processing, better known as ADP. It, too, has some payment offerings, and it serves 990,000 clients in 140 countries.
“Papaya is a great business and I’m a big fan of Eynat Guez,” said Dan Dolev, a senior analyst at Mizuho Americas who follows the fintech industry and ADP. “She is a remarkable leader.”
“That said, ADP has a billion-dollar revenue business in multinational payroll,” Dolev said by email. He explained that his understanding is that Papaya acts as a “global employer of record,” which is similar to ADP’s professional employer organization business, except that Papaya is global and therefore pays employees in other countries on the client’s behalf.
“We believe that the way it’s divided (between payroll processing and payments), it’s actually creating a lot of friction for the client,” Guez said. “It needs to be a seamless process. You need to calculate the payroll, then you need to execute the funds globally.”
Papaya’s U.S. job openings listed on its website indicate openings for product and marketing managers in the U.S. Guez adds that it’s seeking also to hire customer service managers and sales representatives in large numbers.
While Papaya’s U.S. home base is currently in New York, it’s expanding mainly in Austin so that office will soon overtake New York’s to become Papaya’s largest in the U.S., Guez said.
The type of talent that Papaya is hiring is generally moving from New York and San Francisco to Austin and that’s why Papaya’s office there is becoming a key outpost, she explained.
Guez said she splits her time between New York and Israel. Her co-founders include Ofer Herman, who is the company’s chief technology officer, and Ruben Drong, who is its chief innovation officer.
In the future, she foresees potentially partnering with banks to be able to offer financial services to employees, if they consent to be marketed to through their employer. Conversations with European banks about that possibility are underway now, Guez said.