Tipalti Gains Unicorn Status Following $150M Series E

San Mateo-based Tipalti raised $150 million in a Series E round, giving the company a more than $2 billion valuation.

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Tipalti helps companies automate their manual accounts payable functions so that team members can be redeployed into more strategic roles. The company’s sweet spot is mid-market companies, which have 50 to 1,000 employees, and the market size is 600,000 companies worldwide.

Durable Capital Partners led the round, with participation from Greenoaks Capital and existing investor 01 Advisors. The new funding gives Tipalti approximately $280 million in investments since its inception in 2010, according to Crunchbase data. That includes its most recent raise, a $76 million Series D in 2019.

Prior to the company’s new valuation, Tipalti co-founder and CEO Chen Amit said, its valuation was just shy of $500 million last year, meaning its value quadrupled in over a year.

“This is confirmation to what we know: We are leaders in this large category,” Amit told Crunchbase News. “There are major barriers to entry, and we are in a position to dominate and on a path to revolutionize.”

Adam Bain, who previously oversaw Twitter’s monetization efforts, is now a partner at 01 Advisors.

Tipalti was hired by Twitter in 2013 to automate its financial systems. A trend Bain is seeing is companies are either viewed as reactive or as predictive, and he thinks the trend will continue toward organizations wanting to be more modern.

“It was clear to us that Tipalti had the solution we were looking for,” Bain said in an interview. “After we started 01 Advisors and raised our fund, Chen was our first call. Tipalti in our opinion, helps companies be modern and predictive.”

Market potential

Amit estimates the size of the accounts payable market to be $100 billion in annual recurring revenue, but said other sources, including Goldman Sachs, indicate the market size to be in the trillions.

So far in 2020, Tipalti has surpassed $12 billion in annual transaction volume and ended its second quarter at an over 80 percent growth rate compared to the same quarter the year prior, Amit said. In addition, the company has more than 1,000 customers and opened a third office in Vancouver to complement its offices in San Mateo and Israel.

Amit intends to use the new funding to accelerate Tipalti’s pace of growth, extend its global presence, and increase its headcount in developers, product management, customer operations, sales and business development. The company has 350 employees and expects to finish the year with 400, as well as grow by another 250 next year.

“We will be getting more people trained on how to sell Tipalti, as well as start on branding, which we have not done before,” he added. “Another part is continued investment in the product. We will invest more in product development the coming two years than we did in the entire decade prior. We have major initiatives we want to work on and have just scratched the surface of the pain points.”

Illustration: Li-Anne Dias