Start of payment PayFit is the newest unicorn in France raising $ 289 million - TechCrunch
French startup PayFit announced the closure of a new $ 289 million (€ 254 million) Series E round before the holidays. Following this round, the start-up business has reached a post-cash valuation of $ 2.1 billion (€ 1.82 billion).
The company has been building a payment platform and HR-as-a-service software for small and medium-sized companies. It operates in a handful of European countries - around 150,000 people are currently paid through PayFit.
General Atlantic is leading the tour, while some PayFit investors are participating again, such as Eurazeo, Big Venture fund Bpifrance and Accel.
The startup has been on roll since it took its Series D round in March 2022. I asked about PayFit’s valuation and how it has changed since Series D.
“It is true that we have never consulted on our evaluation before. We only shared the size of our funding rounds, ”co-founder and CEO Firmin Zocchetto told me. "I can only tell you that our valuation has increased significantly."
He listed two reasons why PayFit had not had many issues at a higher valuation. First, the company is doing well when it comes to revenue. Start-up annual recycling revenue has increased 70% in 2022.
Second, there is a lot of money going around for the best performing technical companies. He described the current climate as "extremely favorable." And I bet many people would recommend taking advantage of the situation.
The market opportunity
But let 's try to separate the PayFit business a little further to find out how the company ended up here. PayFit lets you manage your payment from a web browser and automate as many steps as possible.
PayFit has a product advantage over other solutions in that you do not have to be an expert and work for an accountancy firm to generate a salary. The startup ensures that you remain compliant and hide the complexity. For example, if there are regulatory changes, PayFit will update its application logic.
The company also has huge market opportunity. Every company needs a payment solution and it's incredibly difficult to switch from one solution to another - the Venn diagram is perfect for a software - as - a - service product.
6,000 companies currently use PayFit. About 80% of them are based in France. Other customers are located in Spain, Germany or the UK More importantly, when someone creates a company from scratch, many of them choose PayFit and stick with it.
Come to think of it, 150,000 employees are not getting paid through PayFit so much. There are tens of millions of workers in France, the UK, Spain and Germany. Before opening a branch in new countries, PayFit wants to capture more market share in these four markets.
Labor laws vary from country to country, which means that there may be different geographical directions due to a natural barrier to entry. For example, Gusto and Justworks are doing well in the US but not in other markets. It's important to see what PayFit wants to be a clear market leader in France, the UK, Germany and Spain.
Finally, once PayFit has the relationship with the HR or administrative expert in the messenger company, it can provide additional services. “We started with pay, but the most important thing for us is the employer-employee relationship,” Zocchetto said.
PayFit offers a variety of tools to manage your vacation, get on board, manage schedules and track employee expenses. Soon, the company will also offer a way to handle annual performance reviews in PayFit.
Basically, PayFit is part of a group of startups that are restarting the administration stack. The founder of PayFit names Qonto and Alan as two companies that are also working on a review of back end devices. Qonto offers bank accounts to SMBs and Alan offers health insurance products to companies.
With 700 employees in Paris, Berlin, Barcelona and London, PayFit now wants to diversify its product offering, integrate with more third - party products and enhance its messenger service. The company wants to "offer the same benefits to small companies as you would to working for large companies," said Zocchetto.