Simplifying the Payments Process

Financial operations are a challenge for any company, but especially for small and medium-sized firms that may not have the resources to vet and onboard suppliers, learn the intricacies of financial regulations, process invoices, or conduct overseas transactions. 

Tipalti is a global fintech company co-founded by Chen Amit that aims to create a modern, holistic, and powerful payable solution that scales with companies’ changing business needs. This is its story.

Publisher Payment Problems

Chen was the CEO of a company that he fortuitously sold right before the 2008 financial crisis. Looking around for another project, he reached out to his eventual Tipalti co-founder Oren Ziv. The two eventually met with the founder of another company in Tel Aviv who complained about the challenges he faced in paying publishers around the world.

“So I… shadowed him for a couple of days, seeing what exactly the problem [was],” Chen says. “It was more than payments…. It was about onboarding publishers that came from many countries around the world. One wanted to get paid with PayPal, one wanted to get paid with wire, and the regulator in that country wanted this piece of information [or] that piece of information, and the bank rejected the payment because of this… It was really a messy process.”

Chen thought there would be at least a small market for a company that provided solutions for such financial woes. So he started one in 2010. They had four customers by the end of the first year, which “showed me that we were onto something,” Chen said. “I doubled the company and went global. I added one more person and hired him in Los Angeles. So I achieved both milestones to help me see if there’s a need in North America as well. And shortly after he joined, we started signing up customers in the U.S., and the rest is history.”

A Quick Product-Market Fit

Lots of companies started around the time Tipalti did. Many of them have since gone belly up, but Tipalti is still thriving. Why? Simply put, the company found a good product-market fit right away and stuck with it.

“So first we hit product-market fit from the get-go,” Chen says. “[W]hen we launched the product, we launched pretty much the same product or part of the same product or one of the products we offer today.”

Part of the reason for this quick success in matching up a product with customers’ needs, he says, is that he didn’t come into this project with any preconceived notions because he knew nothing about the field. Instead, he eagerly learned from those who did.

“I think one of the critical reasons for being able to reach product-market fit very cleanly was because I knew nothing about payments and nothing about online advertising, which was the first few customers… and nothing about banking, money transmission, regulation. I was a clean slate. I came from a completely different domain: telecommunications and information security and business intelligence. So when I solved the problem, I really sat with these few… leaders and listened to them and formed what I believed was the right answer for the problems they presented to me.”

Simplifying Worldwide Payments

Chen says Tipalti’s goal is to make worldwide payments easy. It uses accounts payable software that “manages, executes, and reconciles the entire process of making outbound payments to partners and suppliers,” he explains. “Tipalti is the only global payables solution to streamline all phases of the AP and payment management workflow in one cloud platform.”

The company’s solutions address all aspects of the payments process, including supplier onboarding and vetting, tax and regulatory compliance, invoice processing, payments to global suppliers, supplier payment status communications, and payment reconciliation and reporting. 

Tipalti’s success stems in part from the fact that managing all of this in-house can be difficult, especially if a firm scales without devoting enough resources to managing payments. “What’s challenging with these finance leaders in these companies is that… resources go towards everything but the back office, everything but managing suppliers,” he says. “It’s all about the product, the growth, the market, the go-to market, the brand, the employees, the partners. So you’re left with a finance leader that has relatively complex needs but low ability to execute.”

Marketing to the Middle

Any size company can benefit from its services, but Tipalit’s target market is businesses with up to a few thousand employees, because they often have less money and manpower to devote to financial functions. 

“Having the time and resources to keep up with manual financial operations is taxing on any sized organization, but it is particularly difficult for small-to-midsize firms,” Chen says. “This section of the market is unique because it is where the need is just as great as a corporation’s, but the funding can be extremely low. Because of this attention to the mid-market, Tipalti has become a choice vendor for these companies looking to scale rapidly and remains alongside those companies even after they achieve enterprise status.”

Last year, Tipalti automated more than $36 billion across 200 countries – double the amount in 2020.

Marketing Through Customer Advocacy

Although there are plenty of directions one can go with marketing, Chen has found that word-of-mouth is arguably the best.

“Tipalti has marketing operations like PR, social, advertising, events and so on,” he says. “However, the best way to market a product is through customer advocacy. One of Tipalti’s core values is its commitment to customers, and it’s evident by Tipalti’s 99% retention rate that it’s effective. Giving them the best experience is critical, which is why Tipalti always tries to give them the best possible experience by saving them time, money and ultimately making them look good to their bosses.”

Passion is Overrated

While plenty of people will say you need to be passionate about a particular industry to succeed as a founder, Chen disagrees. Instead, he says you need to be passionate about solving a problem.

“Entrepreneurship does not have to be in your field of passion. To say I wasn’t interested in payments would be an understatement. In fact, it was and still is incredibly unsexy. But there was a pain point I saw in the process, so I seized the opportunity alongside my co-founder, Oren Zeev. We believed enough in ourselves and in our vision for Tipalti to venture into a previously unnavigated field. That belief powered a mindset that allowed us to drop expectations or comparisons to any other startup and build a truly unique and successful company.”

Business Degree is Optional

Chen has a word of advice for entrepreneurs and early-stage founders:  Despite what you may have heard, you don’t need to earn a business degree to have a successful business. That’s because although such training can be useful for some things, so much about running a company is learned through real-world experience rather than from a textbook.

“I know many founders without a business degree and have found the idea that you need one to be successful is all too pervasive and untrue,” he says. “Sure, it helps with anticipating certain situations like investor relations or building trust with stakeholders. [But] those soft skills such as leading others, reading people, and understanding motivations are essential in the startup arena, but they cannot be taught in a class.”

What’s Next for Tipalti

Chen says Tipalti has weathered recent economic storms relatively well, which has set it up for future success. “We’ve had the same relatively short sales cycles from before the recession, through the recession, through price increases, and we’re seeing very hard demand for [our] products. And the same is true for retention; [we’ve had] the same retention before the recession… through now.”

Building on that success, Tipalti is planning to add some new capabilities this year. “The SVB developments exposed some of the value of Tipalti being we run on top of Citibank, J.P. Morgan Chase, and Wells Fargo. So I think our customers really benefit from that. And we saw some influx of customers who are running away from uncertainty to Tipalti. So yeah, we’re continuing with our vision. The vision is to provide this broad, holistic, breadth, depth, and simplicity for our customers. You will see more announcements, some major announcements throughout the year.”

Tell Us Your Startup Story

Are you a startup founder and want to share your entrepreneurial journey with our readers? Click below to contact us today!

Request an Interview

Featured Articles