Digital payments firm Payoneer has raised $180 million, the largest investment in an Israeli FinTech company, and one of the biggest financing rounds seen in Israel in recent months. This could be the company’s last private funding round before embarking on an initial public offering (IPO), according to reports in the media.
As reported in No Camels;
The round was led by American private equity firm Technology Crossover Ventures (TCV), along with former investor Susquehanna Growth Equity. The investment includes $90 million injected directly into Payoneer for expanding the company, and additional $90 million worth of shares that shareholders sold to investors.
“This is a huge investment and the largest funding round raised by an Israeli FinTech company,” Israeli startup researcher Koby Simana, CEO of IVC Research Center, tells NoCamels.
Founded in 2005 by Yuval Tal and Ben Yaniv Chechik, Payoneer enables businesses to send and receive cross-border payments electronically. To date, it has raised $235 million. Earlier this year, the company acquired American escrow services firm Armor Payments for an undisclosed amount. With major offices in New York and Tel Aviv, Payoneer employs 760 people.
According to the company, it is profitable, has a “debt-free balance sheet” and is ranked in the top 100 of Inc. 5000’s financial services companies. According to the magazine, Payoneer has grown its operations by 190 percent in three years, and its 2015 revenue totaled $117 million.
“We believe we can make a difference by empowering entrepreneurs throughout the world by offering them tools and solutions to participate, compete and succeed in the global economy,” Scott Galit, CEO of Payoneer, said in a statement.
he investment follows a year of growth for Payoneer, which opened new offices in India, Japan and the Philippines, and partnered with such giants as Rakuten, a Japanese electronic commerce and internet company based in Tokyo.
“Payoneer’s scale and global reach, along with its proprietary compliance infrastructure, allow it to differentiate itself in the field of international payments,” Nari Ansari, Principal at TCV, said in a statement.
According to research firm eMarketer, worldwide retail e-commerce sales topped $1.9 trillion last year, and are projected to grow to $4 trillion by 2020. Still, Payoneer is facing steep competition from archrival PayPal, which also offers global payment services to businesses and consumers for a fee (which the businesses pay). With a market cap of $49 billion and annual revenues of $9 billion, PayPal is still the most dominant platform for digital payments.
However, in today’s borderless digital world, there’s still room for other players: Payoneer currently serves 3 million businesses and professionals by facilitating seamless global payments while helping them reach new audiences. Thousands of leading corporations, including Amazon, Google and Airbnb already use Payoneer’s services.
Payoneer, one of roughly 430 FinTech companies and startups currently operating in Israel, serves companies in 200 countries, and processes payments made by using 150 currencies. With its solutions, businesses and professionals in both developed and emerging markets can pay and get paid globally as easily as they do locally. According to the company, it “empowers global commerce by connecting businesses, professionals, countries and currencies with its innovative cross-border payments platform.”
The rise of e-commerce and cross-border trends in payment in Australia is evident, with Paypal alone having 5.5 million Australian users. Recent changes by the Australian government also mean that certain transactions between Australian and overseas businesses will not be subject to GST from 1 October 2016.