The travel and expense management software market is estimated to grow by $2.85B from 2020-2024. Payhawk is the platform that simplifies business expenses through its proprietary software solution that integrates all aspects of the spending lifecycle. Payhawk is flexible and can be used by businesses of various sizes and often helps companies transition their transaction process into the digital age. The platform is also bank-agnostic, enabling businesses to adopt without friction. This is all done by a virtual account and payment solution that is tied to your existing bank.
London TechWatch spoke with Payhawk’s Head of Marketing Daniela Danailova-Scherbel to learn more about the state of the expensing software market, the company’s future plans, and latest funding round, which brings the total funding raised to €3.6M across three rounds.
Who were your investors and how much did you raise?
This round is led by Earlybird’s Digital East Fund with participation from Berlin-based TinyVC, industry experts like Mark Antipof (ex-Chief Commercial Officer at Visa Europe) and Keith Robinson (Chief Strategy Officer at Sage), and previous investors such as Eleven Ventures. It’s a €3M Seed round.
Payhawk is a unique platform that enables CFOs and business owners to manage the entire spending lifecycle end-to-end, from the moment an employee requests money, to loading their corporate card with funds, paying and collecting the invoices, to reconciling all transactions in the company accounting software, and finally generating real-time, up to date reports. Payhawk closes the gap between corporate cards and expense management by providing a product that works on top of existing banks.
What inspired the start of Payhawk?
“In many companies, expense management is still far too bureaucratic, non-transparent and full of paperwork,” explains Hristo Borisov, CEO and founder of Payhawk. “Many employees are forced to spend personal funds, manually track expenses with the legacy expense apps, write cumbersome reports, and wait months to get reimbursed. Our payment solution addresses exactly this pain point and supports businesses in their transition to a new, paperless and digital age without being forced to switch banks,” explains Hristo Borisov, CEO of Payhawk.
How is Payhawk different?
Payhawk is an end to end platform that provides a new experience and labor efficiency for managing company spend. To achieve this, we invest heavily in automated data extraction, Optical-Character-Recognition-Software (OCR) and machine learning technologies that automate significant parts of the expense reconciliation process. We also provide great extensibility and customizations, so that our platform can meet complex spend policies for larger organizations. To match the efficiency coming from the automaton, we also provide extremely low FX rates for our corporate cards of 1.25% and there are no monthly fees. Our goal is that through automation and better fees, Payhawk actually pays for itself when you adopted in an organization.
What market is Payhawk targeting and how big is it?
With the new funding, the company is aiming to expand to Europe with Germany being the first target, and it will heavily invest in marketing and team growth. The market size is hard to estimate. According to Hristo Borisov, CEO of Payhawk, however, it has the potential to grow at least five times, as companies like Payhawk make the expense management simple and allow businesses to issue and manage spendings easier. “Products like ours are an enabler. We’ve seen companies that have issued more than five-six cards because the whole management gets easier,” he says.
Who do you consider to be your main competitors?
Spendesk, Pleo, SAP Concur, but also Expensify.
What was the funding process like?
The fundraising process took around six months and we spoke to around 40 VCs, which we already had a contact with. After evaluating several term sheets, Payhawk decided to go with Earlybird because it’s one of the most successful venture capital firms in Europe, with over €1B under management, seven IPOs, and companies like N26 and UiPath in its portfolio.
What factors about your business led your investors to write the check?
“Payhawk decided to combine the best of what exists today and integrate it into a next-generation platform with a great customer experience without forcing businesses to switch banks”, says Roland Manger, cofounder and partner at Earlybird. He continues, “We were impressed with the strong product DNA of the founding team and their relentless focus on customer experience. Payhawk has great market potential as every business needs a solution like this.”
We were impressed with the strong product DNA of the founding team and their relentless focus on customer experience. Payhawk has great market potential as every business needs a solution like this.
What are the milestones you plan to achieve in the next six months?
- Further develop our product to suit the needs of the German market
- Close strategic partnership with relevant fintech players
- Grow the team
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Validate your product first, get your customers active, develop your vision and then go to investors.
Where do you see the company going now over the near term?
With the Blueprint of Germany, Payhawk will be looking into investing more into further European markets in Central and Eastern Europe.
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