Sep
01
2021
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PayEm comes out of stealth with $27M and its answer to the expense report

Itamar Jobani was a software developer working for a medical company and “hated that time of the month” when he had to use the company’s chosen reimbursement tool.

“It was full of friction and as part of the company’s wellness team, I felt an urge to take care of the employee experience and find a better tool,” Jobani told TechCrunch. “I looked for something, but didn’t find it, so I tried to build it myself.”

What resulted was PayEm, an Israeli company he founded with Omer Rimoch in 2019 to be a spend and procurement platform for high-growth and multinational organizations. Today, it announced $27 million in funding that includes $7 million in seed funding, led by Pitango First and NFX, with participation by LocalGlobe and Fresh Fund, as well as $20 million in Series A funding led by Glilot+.

The company’s technology automates the reimbursement, procurement, accounts payable and credit card workflows to manage all of the requests and invoices, while also creating bills and sending payments to over 200 territories in 130 currencies.

It gives company finance teams a real-time look at what items employees are asking for funds to buy, and what is actually being spent. For example, teams can submit a request and go through an approval flow that can be customized with purchasing codes tied to a description of the transaction. At the same time, all transactions are continuously reconciled versus having to spend hours at the end of the month going through paperwork.

“Organizations are running in a more democratized way with teams buying things on behalf of the organization,” Jobani said. “We built a platform to cater to those needs, so it’s like a disbursement platform instead of a finance team always being in charge.”

The global B2B payments market is valued at $120 trillion annually and is expected to reach $200 trillion by 2028, according to payment industry newsletter Nilson Report. PayEm is among many B2B payments startups attracting venture capital — for example, last month, Nium announced a $200 million in Series D funding at a $1 billion valuation. Paystand raised $50 million in Series C funding to make B2B payments cashless, while Dwolla raised $21 million for its API that allows companies to build and facilitate fast payments.

Meanwhile, PayEm itself saw accelerated growth in the second quarter of 2021, including increasing its transaction volume by four times over the previous quarter and generating millions of dollars in revenue. It now boasts a list of hundreds of customers like Fiverr, JFrog and Next Insurance. It also launched new features like the ability to create corporate cards.

The company, which also has an office in New York, has 40 employees currently, and the new funds will enable the company to triple its headcount, focusing on hiring in the United States, and to bring additional features and payment capabilities to market.

“Each person can have a budget and a time frame for making the purchase, while accounting still feels in control,” Jobani added. “Everyone now has the full context and the right budget line item.”

Aug
31
2021
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Sales experience platform Walnut raises $15M to improve product demonstrations

Walnut raised $15 million in Series A funding, led by Eight Roads Ventures, to continue developing its sales experience platform.

Founders Yoav Vilner and Danni Friedland started the company in July 2020. Vilner told TechCrunch that while at a previous company, he was building a category called technology marketing in Israel. He realized that company sales people often ran into problems when it was time to demonstrate their product — the product would break, or they would have to ask another department to open something or add a feature, none of which happened instantaneously, Vilner added.

He and Friedland’s answer to that problem is a no-code platform for teams to create customized product demonstrations quickly, be able to integrate them into their sales and marketing processes and then generate insights from the demos.

Walnut engagement example. Image Credits: Walnut

“We let the sales and marketing teams replicate the SaaS product in our cloud environment, which is disconnected from the back end,” Vilner explained. “They can create a storyline to fit their customer and the demonstration, and then following the demo, sales leaders can get insight on what was good or bad. It encourages the sharing of knowledge and what story worked best for which kind of company.”

The company’s latest round gives it $21 million raised to date, and follows a $6 million seed round that included NFX, A Capital, Liquid2 Ventures and Graph Ventures, Vilner said.

Walnut serves over 60 business-to-business clients, including Adobe, NetApp, Varonis and People AI. In addition to Tel Aviv, the company has offices in New York and London.

Vilner intends to use the new funding to grow the team across the U.S, Europe and Israel and continue developing its technology and platform, including tools to embed demos into a website for product-led growth. He also expects to double the team of 25 over the next year.

Eyal Rabinovich, an investor at Eight Roads Ventures, said his brother is a Walnut customer, and the company fits with one of the firm’s theses around broad vertically integrated brands in SaaS and deep technology.

Rabinovich was tracking the sales enablement space for a while and said many companies claim to provide something unique, but it is usually workflow and processes. In Walnut’s case, it is solving something at the core of sales.

“They make everything measurable, and the ‘holy grail’ is conversion, and even just 1% conversion could mean millions of dollars,” he added. “Every company we spoke to wanted to use this product. Customers were telling us they closed the sales cycle within two weeks.”

 

Jul
20
2021
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Commercial real estate lending startup Lev brings in $30M on a $130M valuation

Commercial real estate has been slow to embrace technology; though it has an addressable financing market of more than $40 billion, putting together a deal is still mostly manual, paper-heavy and complicated.

New York-based Lev is taking on this problem by automating workflows online and gathering hundreds of millions of data points into machine learning software to ensure financing accuracy. To do this, the commercial real estate financing transaction platform raised $30 million to give it a $130 million valuation just two years into its inception.

The latest financing comes four months after the company raised $10 million in seed funding led by NFX. Greenspring led the latest round, with participation from First American Title. Existing investors NFX, Canaan Partners, JLL Spark, Animo Ventures and Ludlow Ventures also joined in to give Lev total investments of more than $34 million, according to Crunchbase data.

Lev founder and CEO Yaakov Zar previously co-founded Boston-based Dispatch, which built tools for home services businesses. It was when he and his wife went through the homebuying process — and their mortgage fell through — that Zar decided to look at real estate financing.

He channeled his frustration into becoming a licensed mortgage loan originator. After relocating to New York, Zar was helping a friend at a nonprofit organization refinance their building and got a firsthand look at what he said was a fragmented commercial real estate mortgage industry.

Companies like Blend are addressing the problem of real estate lending, Zar told TechCrunch, but very few are focusing on commercial real estate, where lending is sensitive to interest rates and total amortization. In addition, property owners have a burden of refinancing every five to 10 years.

“Legacy businesses like JLL, which is an investor, Cushman Wakefield and CBRE work on lending, but they are much more ‘relationship focused’ than tech focused,” Zar said. “We think that it is a necessary part because the deals are so large and complex that you need a relationship for them, but transactions less than $1 billion are pretty straightforward. On experience and product, no one is close to us.”

Initially, Zar and his team wanted to build the “Rocket Mortgage of commercial real estate lending,” but found that to be difficult because real estate brokers are putting together their own pitch books for lenders. Instead, Lev is building a technology platform of more than 5,000 lenders with information on what projects they like to finance. It then analyzes a customer’s portfolio and connects them in minutes with the right lender, taking 1% of the loan amount for each transaction as payment. Lev is also working to be able to close deals online.

Zar wasn’t looking for funding when he was approached by investors, but said he was introduced to some people who liked the company’s growth and trajectory and decided to accept the funding offer.

He intends to use the new funding on product development, with the aim of giving a term sheet in seconds and closing a loan in seven days. Right now it can take a week or two to get the term sheet and 45 to 90 days to close a loan.

The company has about 40 employees currently in its New York headquarters, Miami R&D center, Los Angeles outpost and remotely. Continued investments will be made to expand the team.

Lev grew 10 times in volume in the past year, closing approximately $100 million of loans in 2020. Zar expects to close over $1 billion in 2021.

“Customers come back to us repeatedly, and there are a ton of referrals,” Zar said. “We want to be the platform on which capital market transactions are processed. You need an advantage to network and find great deals. I don’t want to mess with that, but when you find it, bring it to us, we will close it and provide the asset management with the best option to close online and manage the deal from a single platform.”

Meanwhile, Pete Flint, general partner at NFX, told TechCrunch that he got to know the Lev team over the last 18 months, checking in on the company during various stages of the global pandemic, and was impressed at how the company navigated it.

As co-founder of Trulia, he saw firsthand the problems in the real estate industry over search and discovery, but as that problem was being solved, the focus shifted to financing. NFX is also an investor in Tomo and Ribbon, which both focus on residential financing.

Wanting to see what opportunities were on the commercial real estate side, Flint heard Lev’s name come up more and more among brokers and industry insiders.

“As we got to know the Lev team, we recognized that they were the best team out there to solve this problem,” Flint said. “We are also among an amazing group of people complementing the round. The folks that are deep industry insiders will put a helpful lens on strategy and business development opportunities.”

 

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