PayEm raises USD 220 mln in equity and debt

To set the stage for further growth, PayEm has closed a USD 20 million Series A equity round and taken out a USD 200 million credit line, the company announced. Viola Credit, Mitsubishi Financial Group, Collaborative Fund, Pitango First, NFX, LocalGlobe, and Glilot+ are among those who contributed the USD 220 million in funds, which will be put toward expanding PayEm’s card operations, serving larger customers, and improving the employee experience within the core digital product.

Why the decision to raise debt versus equity?

For the company it came down to a matter of timing and flexibility. PayEm opted for warehouse lending, where its lender set up a facility that PayEm can access and use to seed its own loan origination. As more customers borrow from PayEm, both PayEm and the lender profit off the lending.

Company officials stated that in order to continue and support the expansion of their customers, they are using a credit facility to finance their clients’ short-term payments. A credit warehouse facility is a tool perfectly structured to support the customers’ payments activity and provide them with monthly payment terms in order for them to keep their businesses flowing. The size of this credit raising reflects the growing volume of monthly transactions on the PayEm platform.

Handling the current economic reality

PayEm offers procurement tools and workflows for expense approval automation, accounts payable automation, purchase order creation, expense reimbursement, and credit card management. Its ‘record-to-report’ platform captures employee spending requests, involving relevant stakeholders for approval based on the data collected and providing budgeting capabilities for budget overseers.

With the current macroeconomic conditions, it is important for companies to have an efficient and clear lens into their financial health. PayEm aims to be that single source of truth for them as they may weather turbulent times, navigate supply chain issues, and simply need to do more with less. While the software-as-a-service industry is impacted by the overall mood, PayEm’s officials noted that their product value is increasing during times like this, helping to visualise spend, reduce costs, and make the entire procure-to-pay process easy and transparent.