God, what a joy it is to plant a tree,
And from the sallow earth to watch it rise,
Lifting its emerald branches to the skies
In silent adoration; and to see
Its strength and glory waxing with each spring.
Yes, ’tis a goodly, and a gladsome thing
To plant a tree.
Today, Tipalti, announced raising a $270MM Series F, valuing the company at $8.3BN. The round was led by G-Squared, with participation from new investors Marshall Wace Capital and Counterpoint Global (Morgan Stanley), in addition to current investors Zeev Ventures, Durable Capital Partners, 01 Advisors and others. This brings the total funds raised by the leader in global accounts payable automation, to over $550MM, putting it well on its way to becoming (one) of Group 11’s first decacorns.
After this financing, Group 11 remains the second largest investor and our Founding Partner, Dovi Frances, continues to serve on Tipalti’s Board alongside Chen Amit, Chairman Oren Zeev, and Carl Pascarella.
It has been a privilege to be a part of Tipalti’s story since Group 11’s was first introduced to the founding team in 2012. We have written extensively about how Tipalti has the defensibility, the right investors and executives, unchallenged market leadership, the blue ocean opportunity to disrupt a >$1.5TRN addressable market, and thus the room for near infinite global growth. This week’s announcement at a $8.3BN valuation does not come as a surprise to us. We’ve seen the fruits of their labor growing for some time. Tipalti was an investment we first made long ago: a seed that was planted and it has been ‘a goodly, and a gladsome thing’ to watch it grow into a huge tree!
Go Plant A Tipalti
When I reflect on what Chen, Oren, Tipalti’s investors, and the continually expanding team at Tipalti have done over the past decade, I’m reminded of an analogy of my parents’ apple tree. In the late 90s while I was finishing high school in California, and at the recommendation of my green thumb grandmother, my parents planted a Gordon Apple on the side of their house next to some already producing Meyer Lemons and tangerine trees.
For the first few years, the tree was spindly and produced some absolutely bland and sparse fruit. My impatient-teenager-self thought something was certainly wrong with this tree. Fast forward almost 20 years, and this tree now has a massive trunk, strong roots and limbs, and grows some amazing apples. Even though it’s technically a ‘dwarf’ apple, it dwarfs any of the other fruit trees in the vicinity. It also produces at a quantity that my parents and their neighbors can’t eat, preserve, or make pie fast enough to keep up with its production!
This analogy of a fruit tree may seem obvious and simple, but it is exactly what I think of when I look at Tipalti’s growth over the past decade to its current state in 2021. Fruit trees take time to reach real production and are planted by persons who look at long term growth, not quick flips and immediate but shallow yields. In the case of my parent’s apple tree and Tipalti, both required foresight, significant upfront inputs, and investments to establish their foundation and roots. In addition, they both required the input of extended time horizons and although they first started with small seeds, they’re now massive entities.
For the apple tree, the investments were soil, fertilizer, proper pruning, and patience. For Tipalti it was Oren Zeev planting the initial idea with his friend Chen Amit. Then, it was significant capital, the right executive hires, years of getting state-by-state MTLs, a focus on phenomenal customer retention (99% annually!), years of compiling and digitizing global tax codes and accounting procedures, and a decades-long approach to reaching global customers. It was also perseverance and looking at the fruit in a future yield. Group 11 did not just ‘watch Tipalti grow’ passively; we led their September 2016 Series B round when no investor understood Tipalti’s global offering and long-term vision, and was thus unwilling to back them.
With two decades for the apple tree, and over a decade for Tipalti, both are now experiencing real growth and the fruits of their labor.
Watch it Grow
From here, Tipalti will continue to grow almost limitlessly. Even into 2022, Tipalti has less than 1% churn, >600,000 potential global customers, and a $1.5TRN industry. They’ve opened London and Vancouver offices in the past 18 months with plans for further EMEA and SEA expansion to widen their global reach. We predict that Group 11’s stable of unicorns will likely be a pasture of decacorns with Tipalti leading the herd in the next few years.
I encourage our readers to go to our previous pieces on Tipalti: The Inevitability of a Trajectory (Oct 2020), Seven good years at Tipalti (and the best is yet to come) (Sept 2019), Another Brick In The Wall (Sept 2016), and Software Companies as an Investment Asset Class (Jan 2014). It has been a “goodly, and a gladsome thing” to see Tipalti grow!
Congratulations to Co-Founder and CEO Chen Amit, Co-Founder and Chairman Oren Zeev, Tipalti’s executive team, all of their employees across the globe, and new investors G-Squared, Capital International, Morgan Stanley, and Marshall Wace Capital!
Go plant a Tipalti and watch it grow!