Crypto payments: ‘The promise is not yet there,’ Tipalti CEO says

Tipalti CEO Chen Amit speaks with Yahoo Finance Live about how the financial software company reached a $8.3 billion valuation and the future of crypto payments.

Video transcript

ADAM SHAPIRO: We want to tell you about the latest developments in the fintech world because there's a 10-year-old, roughly 11-year-old fintech firm which has quadrupled its valuation recently. They're almost up to, what, $8.4 billion. And that company is Tipalti, which just raised $270 million. Their co-founder and CEO, Chen Amit, is joining us now to discuss how this payments platform is not only going to move forward but is working in the background with now 2,000-plus clients. So welcome. It's good to have you here.

For those of us who don't, you know, actually see how payments work, how important is this? Because you've been named one of the top-growing companies. And the follow-up question is going to be when are you going public? because you've just finished your series F fundraising.

CHEN AMIT: Yes, so we help high-growth, mid-market companies, companies between 50 employees and 1,000 employees. We help with their financial operations.

What's interesting with that group is that the finance leaders in these companies are usually the last to get any resources from the company. Mid-sized companies would rather invest in the product, in the company, in the growth, in the customers, in the employees, in anything but the back office and financial operations, and therefore you need a very broad, relatively deep, and very simple solution to solve their challenges, and that's what we do.

EMILY MCCORMICK: This is Emily here. After this latest fundraising round, Tipalti's valuation quadrupled to $8.3 billion. What exactly about your business or the opportunity in this industry do you think was not perhaps fully appreciated beforehand by your investors?

CHEN AMIT: Yeah, I think there's a greater appreciation for the whole B2B payments market. But specifically for us, we are facing a huge opportunity. Around 700,000 companies worldwide, around $70 billion in our current product offering, that's the addressable market that's ahead of us in annual fees. And the market is extremely underpenetrated. Around 4% to 5% of the market is currently being served.

If you add to that, that Tipalti is the de facto leader, we are winning more than our fair share, so to speak. Our customer retention, our gross annual dollar retention I think is the best of any industry, any geography whatsoever. 99% annual gross dollar retention is kind of a testament to not only the value we bring our customers but to the fact that we are heads and shoulders above our competitors.

So by leading-- being the leader in a nascent market with high barriers to entry and given that in the next 18 months we will invest in the product offering as much as we did in the previous 11 years combined, our investors are seeing that we can control, command, capture this opportunity in its entirety, and that's what gets them excited.

ADAM SHAPIRO: We've just had hearings in Washington, DC, about regulation over crypto and Bitcoin, and yet one of the key headlines there is the efficiency with which crypto assets can be used for payment. Does your platform-- do your services take into account the fact that retailers, and even with only 15 employees, that that is what's coming and that it's going to be far more efficient than the way we do it?

CHEN AMIT: So we've been watching crypto for the last 10 years. I think 2011 was the first year I was asked about crypto by one of my customers. And the promise is not yet there. I think crypto as an asset exists. Potentially NFTs and metaverse, the future might be there. The present is not there.

And in terms of facilitating payments, the current cryptocurrencies may be the future. Maybe the new cryptocurrencies can solve it differently. But currently, crypto transactions take longer and are more expensive than what it would take with Tipalti.

So we're still in a watch-and-see perspective from our perspective. If crypto is a payment method that we need to adopt, we will adopt it. But for so far, we've seen very little demand from our customer base and our supplier base to support it, and we'll keep on watching the developments.

ADAM SHAPIRO: You were ranked among, you know, the fastest 500 growing companies globally for the fourth consecutive year in a row. So what you watch and what you see is absolutely valuable to investors going forward.

Chen Amit, Tipalti's co-founder and CEO, all the best to you and continued success. When we come back, we get ready for the closing bell.