Payment automation solution Tipalti raises $13M

Steven Loeb · October 22, 2014 · Short URL: https://vator.tv/n/39e8

Tipalti helps companies management payments across multiple countries, currencies and regulations

With the rise of the Network Economy, with all of the marketplaces, ad networks, crowd sourcing, affiliate networks and monetization, there is a big problem that needed to be solved: all of the marketplaces, ad networks, crowd sourcing and affiliate networks that exist across multiple countries, and different types of currencies, have made paying out much more complicated.

Pay-outs management automation platform Tipalti is looking to solve that issue by automating the process, and now it has some fresh funding to  put its vision into practice. It has just raised $13 million in a Series B round of funding, it was announced on Wednesday. Wicklow Capital led the round.

"These fast-growing businesses need to pay-out to their partners at high volumes across different payment methods, countries and currencies while ensuring ever-increasing tax and regulatory compliance and a timely, error-less payment experience for their partners," Chen Amit, co-founder and CEO of Tipalti, told me in an interview. 

"Right now, these companies are largely handling this manually with their finance departments processing pay-outs, determining necessary information to collect by country, collecting necessary tax forms and performing payment reconciliation."

So what the company does is it automates the entire mass global payments operations process, making it easy to pay any vendor, partner, or customer. It handles payment setup and processing, payee payment method selection, payee currency selection, payment issue avoidance and resolution, tax form collection, regulatory compliance, fraud management, payment reconciliation and reporting, invoicing, and more.

So, for example, one of Tipalti's customers is TapJoy, a mobile and app monetization platform. Part of the business included making payments to app developers and publishing partners every month, across approximately 40 countries, and all in local currency. By using Tipalti, the workload associated with these mass payouts decreased by over 50%.

"The enterprise-class reconciliation, communication, tax and regulatory compliance capabilities of Tipalti, have elevated our mass-payout process to highest industry standards while significantly increasing publisher satisfaction and loyalty to our brand," TapJoy said in a statement provided to VatorNews.

The typical Tipalti customer reports at least a 50% reduction in workload spent managing their pay-outs operation, and at least a 25% reduction in direct payment transaction costs, Amit told me. They also see a "significant reduction in payee payment processing errors, and an improved partner payment experience."

The company now has over 250,000 payees and process over $1 billion annually, with operations in 190 countries. Customers include Chartboost, TouchofModern, PulsePoint, Disqus, Matomy, A4D, MUNDOmedia, Perion Codefuel, ClickDealer, and Infolinks.

The company says that it plans to use the new round of funding to aggressively grow sales and marketing, to invest in product development and R&D, and to expand its business to new verticals and markets.  

Right now, Amit told me, he does not see any direct competitors to his business, except the status quo, or "Network Economy companies such as marketplaces or ad networks manually running their pay-out operations.

"We need to get the word out to the market that they do not need to settle for this and there is a more efficient way to run their business and scale their companies for future growth," he said.

The issues caused by pay-outs go beyond just processing, he told me, but also includes issues such as allowing partners to select their currency and payment method of choice by country, collecting their partner's required tax forms, handling regulatory compliance, and automatically updating processes as tax and regulatory environments change across the world, among many others. 

"These pay-out operations only get more complicated, painful, and risky as these Network Economy companies expand globally and deepen their international partner reach," Amit said. 

Ultimately, Tipalti's philosophy can be summed by its name, which means, "I took care of it" in Hebrew.

"We want to help companies, large and small, who have complicated global pay-out requirements take the pain, risk, and waste out of these processes so they can focus on growing, scaling and innovating rather than on internal processes and to help them improve and differentiate their partner relationships in the process," Amit said. 

Founded in 2010, Tipalti does not disclose its total funding to date, but ha previously raised money from Wicklow Capital; Oren Zeev of Orens Capitall Barry McCarthy, the former CFO of Netflix and Music Choice; Dan Rose, VP of Partnerships at Facebook; Richard Sarnoff, Senior Adviser of KKR and Chairman of Bertelsmann; Donald Katz, Founder of Audible and VP at Amazon; and Dan Rosensweig, CEO of Chegg.

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I am a veteran high tech executive and a repeat entrepreneur. Prior to Tipalti I was CEO of Atrica, the innovator in the Carrier Ethernet market. Atrica was sold Nokia-Siemens.