Startup FInance

Meet Your New Purchasing Department: All Your Employees

Written by Andrew Hoag, founder and CEO of Teampay.

As you may have seen on TechCrunch, Teampay recently announced our $12M Series A, led by Tribe Capital. We look at this fundraise not as a standalone achievement, but as a meaningful step on an exciting journey. 

I came up with the idea for Teampay while experiencing my own frustrations as an operator. I was in the early stages of starting a new project, trying to focus on my business strategy, and I was constantly being bombarded by employees’ and contractors’ requests to use my card for services, purchase items on their behalf, or reimburse them for things I was seeing for the first time.

As a result, I realized that the way businesses spend money has fundamentally changed over the past decade. First, the explosion in SaaS software, fractional services, and on-demand everything means that there is simply more consumption happening in business today. Second, as vendors increasingly try to sell around a centralized procurement process, purchases are being made at the edges of an organization. Lastly, the walls of an organization have never been more porous, with freelancers, contractors, specialized agencies, and remote employees all buying things on behalf of the company. 

As an entrepreneur, I was excited by these changes, but frustrated with the operational inefficiencies that resulted from them. Finance is tasked with managing a new world of decentralized purchasing, yet they have been stuck with software tools built for the past. Finance teams are struggling with policy misalignment, manual work, and best-guess accounting. They frequently chase down employees for receipts and other missing information. In short, they spend way too much time trying to figure out who bought what, and why. We started Teampay to answer that question.

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When we launched Teampay in 2017, we were misunderstood by many outside of the operational finance function. I was often asked, “How are you different from an expense system?” and told, “A/P is already a solved category.” Customers like Mixpanel, Consensys, and Chime, however, told us a different story. Their challenges mirrored the ones I had faced several years before, and they were excited that we had developed a modern solution. Not only does Teampay’s distributed spend management platform provides controls and real-time visibility, it also delivers a delightful user experience that empowers employees. 

Fortunately, Teampay had great investors, including Precursor Ventures, CoVenture, and Crosscut, make a big bet on our vision for the future. With that early Seed funding, we grew the business by 20%+ month/month coming into this year. 

Having scaled quickly, we knew it was time to take more capital. But equally important as raising the round was finding an investor who is as passionate about Teampay’s mission as we are. I remember meeting Jonathan Hsu from Tribe Capital at the clichéd Mission area coffee shop in SF—but this was not a VC out of central casting. Jonathan, and his partners Ted and Arjun work based on first-principles not “patterns,” use data to inform decision-making, and are intensely curious—just like us. 

With Tribe on board, we are already starting to make strides to grow our organization. We have added key executives to the leadership team, specifically Peter Nesbitt, VP Finance; Nicole Lindenbaum, VP Marketing; and Matt Petcoff, Head of Sales. In addition to Justin Oblak, VP Engineering and Leah Ward, Chief of Staff, these new hires round out our executive team. 

For me, closing our Series A round was a significant milestone not because of the fund raise itself, but the foundation it has set for our future growth. This will allow us not only to maintain our lead in this emerging category, but also push the envelope of innovation to build world-class distributed spend management software for the enterprise. I could not be more happy with the collection of people who have helped the business get where it is today, and I am excited to welcome Tribe and our new leaders to the Teampay team.