Payoneer Raises $180m in Capital Amid Talk of an IPO

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Yuval Tal, left, and Keren Levy of Payoneer.
Yuval Tal, left, and Keren Levy of Payoneer.Credit: Eyal Toueg

Payoneer, the Israeli-U.S. provider of global payment-processing services, said on Wednesday it raised $180 million from investors amid speculation that it was readying itself for an initial public offering.

The investment round was led by TCV Technology Crossover Ventures, joined by existing investor Susquehanna Growth Equity. More than half of the money raised will go into the company, while the rest will be used to buy shares from existing investors.

Founded in 2005, New York-based Payoneer’s platform helps businesses doing overseas transactions make and receive payments in their own currency. The company also offers services in regulatory compliance, tax-form automation and risk monitoring, making the process of trading internationally easier and cheaper.

The company says it has been posting double-digit growth throughout its history and now has revenues of about $100 million annually and has been profitable for the past three years.

Keren Levy, chief operating officer and the top executive for the company in Israel, didn’t deny that Payoneer was readying itself for an IPO.

“There have been discussions about an offering and we’re working on preparing the infrastructure and ground for one, but it will happen when it’s right for the company. This fundraising is aimed at growing the company,” she said.

Palo Alto, California-based TCV says on its website that it has shepherded some 100 portfolio companies to IPOs and two weeks ago co-led the mammoth $555 million round for Airbnb.

Payoneer was formed by Yuval Tal, now its president, five years after he formed a similar company called Borderfree that also focused on international trade and went public in 2014 before being bought by Pitney Bowes.

In 2010, the government of Dubai alleged that Payoneer distributed some of the prepaid cash cards traced to suspects sought in the killing of Hamas official Mahmoud al-Mabhouh. At the time Tal said the company was “very surprised” to be cited in the police report.

Payoneer has raised $65 million since it was founded from investors like 83North and Carmel Ventures as well as private backers. “We have an opportunity for investors to get some of their money back — that’s natural in a company that was formed 11 years ago,” said Levy.

While 560 of the company’s 8780 employees worldwide work at its Tel Aviv research and development center, Payoneer moved its headquarters to New York and hired Scott Galit, a former MasterCard and First Data executive, as CEO in 2010.

Payoneer has thousands of customers, mainly small and medium-sized businesses in more than 200 countries. But it also counts as users some of the world’s biggest internet companies, such as Amazon, Airbnb, Google, Getty Images and UpWork, which use it to pay suppliers.

Payoneer’s competition comes from the big global banks, a spokesperson told the venture capital industry website VentureBeat, with the majority of international payments “still carried out via paper check and international money orders.”

Galit said the proceeds of the round going into the company would be used to develop its platform but also for acquisitions. Payoneer made its first-ever acquisition in March when it bought the U.S. escrow-services company Armor Payments.

“In the world of payments there are a lot of tools that haven’t been automated,” said Levy, “There are still a lot of services we can add to the platform and modernize the segment — and that’s what interests us.”

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