Teampay Raises $12M Series A: How Enterprise Software Can Further Workplace Inclusion

Tuhaye Venture Partners | Blog
Date: September 26, 2019

Over the last twenty years, technology has dramatically increased workforce productivity across every vertical, with advances in computing, communication, and collaboration empowering knowledge workers to do more with less. This innovation has been driving both the rise of high-growth venture-backed startups, as well as disrupting traditional enterprise workforces that value tech talent and skills above all else.

At Tuhaye, enterprise software is a core focus of what we do as a fund, and when we look for investments, we are laser-focused on the principle of understanding how technology is further enabling this workforce productivity, which in turn justifies pricing and the underlying fundamentals of the business.

Two years ago, we invested in Teampay, which aspired to build a purchase management system designed around the modern workforce. With Teampay, businesses can empower employees to buy the goods and services needed to drive productivity within a defined company policy, without burdening their employees with those expenses tied to expense reimbursements.

For years, the consumerization of the enterprise has created a massive expansion of the B2B Ecommerce market, with over $1 trillion of spend in 2018, expected to grow by another 10% this year by many market estimates. As a business category, managing and facilitating this spend is a massive billion-dollar company opportunity that many venture capitalists have built theses around.

Opportunity aside though, managing an investment over a 7–10 year lifespan requires passion and focus, and it’s very hard to include “purchase ordering” and “passion” in the same sentence. That being said, we believe Teampay has one of the highest potentials for social good in the portfolio, coupled with its huge potential as a business, due to the fact that its value proposition goes to solve one of the largest systemic inequalities that exists inside of businesses today.

To frame this problem, we’ll use my own history as a lens. In 2013, I graduated Columbia Business School and began working for a small venture capital firm here in New York. While I was extremely fortunate to have the resources needed to undertake a full-time MBA program, the fact remained that I had invested my entire life-savings accrued to this point and incurred a significant amount of debt to attain an education I had deemed critical to follow my passion of investing in high-growth tech-enabled businesses (in hindsight, this sounds like a VERY boring passion compared to my previous career as a professional opera singer). At great expense, Columbia afforded me the ability to learn the craft from some amazing mentors, such as Ed Zimmerman, Bob Greene, Matt Gorin, Stuart Ellman, and Will Porteous (the list goes on of course!), and learn the necessary skills needed to produce the successful investment track record I hold today.

Despite achieving the career of my dreams through dedicated hard work and some fortuitous timing, I faced immediate difficulty at my firm on day one of accepting an offer post-MBA. As the only junior employee for a small firm, my responsibilities of sourcing new investments and performing diligence were not without cost. In fact, my partners would routinely look at my monthly expense reports related to T&E and note that if I wasn’t regularly spending money on coffees/lunches with entrepreneurs, then it was a reflection of the effort I was placing around sourcing and building the firm’s pipeline. This was in addition to the expenses related to brand building at conferences, travel and lodging when doing diligence off-site at portfolio companies, and subscriptions to software products needed to further enable my own learning or productivity.

Without a solution like Teampay, I was bearing these expenses on my personal credit card and was subject to our firm’s monthly expense reimbursement policy and repayment schedule. With the entirety of my small credit limit being tied up in business expenses and no savings to fall back on, I struggled in the way many Americans do, paycheck to paycheck without the ability to make ends meet on a monthly basis. I’ve been fortunate to manage these hardships and get to where I am today, but in hindsight the sad truth of all this was that if I simply had access to more credit (either through the firm, or personally), I probably WOULD have been a more productive employee early in my career.

This is the social good and productivity a solution like Teampay provides the modern knowledge-based workforce. Educational inflation and credentialism have created a world where people are paying off student debt well into their 40s. This mountain of personal debt blunts the productivity and performance of employees, which directly impacts the bottom line of every company. With over $1 trillion in sales measured in B2B Ecommerce in 2018 and growing, firms need to adapt to this new world where employees can spend on the company’s behalf, however firms that allow these expense burdens to be sheltered by their employees rather than by their own balance sheets are doomed to suffer issues related to employee retention, happiness, and most importantly productivity, which drives the bottom-line of every business on the planet.

Today, we’re proud to share that Teampay, a Tuhaye portfolio company since December 2017, has announced a $12 million dollar Series A led by Tribe Capital to continue serving this mission and creating a future of work where employees can succeed as a function of their own skills and dedication and not their access to credit and capital. We’ve already seen this thesis play out over the first two years of our seed capital investment, and we’re really excited to see it continue to grow and thrive over the next decade to the benefit of all employees worldwide.

Keep it up guys!