UK-headquartered business payments and expense management platform developer Payhawk extended its series B round to $215m today, adding $100m from investors including customer management software provider HubSpot’s corporate venturing unit, Hubspot Ventures.
Venture capital firm Lightspeed Venture Partners led the extension, which also featured Endeavor Catalyst, Sprints Capital and Jigsaw VC.
The round ostensibly makes Payhawk, which also has offices in Sofia and whose founders are Bulgarian, the first Bulgaria-founded company to reach unicorn status, with a valuation of $1bn.
Founded in 2018, Payhawk provides payments, cards, invoice and expense management services to small and medium-sized businesses and enterprise customers through a one-stop-shop platform model.
The company will use the funds to aggressively expand into the medium-sized enterprise market and grow geographically. It also plans on opening offices in Amsterdam, Paris and New York over the course of 2022 while tripling its employee base to 300.
The $112m first tranche of the round was closed in November 2021. it was led by Greenoaks and also backed by QED Investors, Earlybird Digital East and Eleven Ventures while another $3m was raised the same month from an unnamed backer.
QED Investors had previously led a $20m series A round for Payhawk in April 2021 with backing from Earlybird Digital East, which had led a $3.5m seed round in early 2020 also featuring TinyVC and private investors including Keith Robinson and Mark Antipof.
The first tranche was billed at the time as the second largest series B round in the Central and Eastern Europe (CEE) region, outgunned only by a $153m round in 2018 for UiPath, a Romania-founded developer of robotic process automation technology that is now listed on the New York Stock Exchange.
Startups in the CEE region, including those which subsequently moved headquarters, have experienced a rapidly increasing level of investment in recent years, doubling their combined enterprise value to over $213bn from 2019 to 2021, according to Dealroom.
Ukraine-founded writing editing software provider Grammarly raised $200m from BlackRock and Baillie Gifford in November 2021 at a $13bn valuation, while Lithuania-based second-hand fashion marketplace Vinted had received $303m six months earlier in a series F round backed by Burda Principal Investments, part of media company Hubert Burda.
The largest round for a company in the region over the past year was the $711m secured by Estonia-based ride hailing service Bolt in January this year at a valuation of approximately $8.4bn. It was co-led by investment and financial services group Fidelity with venture capital firm Sequoia Capital.
Payhawk’s founder and chief executive Hristo Borisov said of the latest round: “We always knew that we could build a big company if we addressed a significant problem in a large market. The size of the opportunity still drives our growth and ambition today.
“Every employee that deals with company payments feels that there should be a better way to do it, but this huge problem was never tackled by a strong product team with hardcore engineering background. This is what Payhawk brings to the market.
“Becoming the first unicorn in Bulgaria is a huge testament to the hard work and resilience of our team over the last three and a half years. We are just at the beginning of our journey, and we cannot wait to continue reinventing how businesses manage their payments.”
Image courtesy of Payhawk.
