Sherman Oaks-based Papaya recently raised $50 million in Series B funding that will strengthen its mobile bill payment application, expand its team and create more partnerships.
The funding round was led by Bessemer Venture Partners in San Francisco, a venture capital company that has invested into companies such as LinkedIn, Yelp and Pinterest. Other investors include Sequoia Capital, Acrew Capital, 01 Advisors, Mucker Capital, Fika Ventures, F-Prime and Sound Ventures.
Papaya is an app that allows users to take photos of any bill – from parking tickets to utilities to medical invoices – and facilitates payment with the user’s preferred credit or debit card. According to the company, the payment application is powered by artificial intelligence that can reach every single business in the United States that issues bills.
Papaya Chief Executive Patrick Kann said that one of the main reasons he believes the company has received strong funding is because it sits within a largely untapped market. He added that his team, which is looking to expand, has a roster of seniors in the fintech industry and others with expertise in ancillary markets.
Lastly, Kann said that Papaya’s popularity has grown with zero organic cost to the company.
“If you look into the past 20 years, very few companies managed to achieve what we have achieved,” he said. “One of them was PayPal (in its) early stage, piggybacking on eBay.”
Papaya currently has a 4.8 rating on the app store with 76,000 reviews as of Jan. 11.
Banking plus tech
Papaya was established in 2016 by Kann and Chief Technology Officer Jason Meltzer. Kann has experience in banking and served stints at the World Bank and IdeaLab. His goal was to make a company that would create a deep social impact and alleviate stress from having to pay stressful or unexpected bills.
Meltzer, who spearheaded the tech development of Papaya, has worked at iRobot, where he led development for the computer vision technology used in the Roomba, an autonomous vacuuming device. Kann said that it is a challenge making Papaya’s automation and integrations consistent, which if done right, makes every payment feasible.
“Patrick and Jason have built the technology and assembled an extraordinary, mission-driven team to reshape the bill payment process and empower businesses and consumers to operate with a new level of efficiency and sophistication,” Charles Birnbaum, a partner at Bessemer Venture Partners, said in a statement. “We’re excited to support Papaya as they continue to build out their platform.”
According to Kann, the company’s application is tied to his upbringing in Brazil, where a national standard barcode allows for universalized cashless payments on nearly any bill.
Kann and Meltzer assumed a similar, centralized payment system would work in the U.S., so they hatched a plan.
“Jason and I developed a prototype of Papaya and we printed out little yellow stickers that said, ‘Pay Through Papaya,’” Kann said. “I walked around many places here in Los Angeles … and every time I’d see a parking ticket, I’d put the yellow sticker on the ticket.”
To Kann and Meltzer’s surprise, people were downloading the app and paying their parking tickets and other bills as well. “That actually validated our assumption that people would like to have a centralized way to make their payments,” Kann said.
Torn-up bills
Papaya has come far from Kann seeking random cars to place promotional stickers on. Now all parking tickets in Las Vegas come with a recommendation to pay the fee with Papaya.
The application is even capable of reading bills that have been ripped into multiple pieces and placed at different angles. “We developed top-notch technologies that extract all the data from an image and developed payment automation mechanisms that get any bill paid,” Kann said.
One challenge for Papaya, Kann said, is the status quo that remains for people to still pay bills via websites, mail or phone calls. But the company is on track to acquire almost 1 million active users per year according to Kann.
Another challenge for Papaya is capturing the same culture and spirit that it had before the transition to remote work brought on by the pandemic.
“The only thing that is important is that the team is energized, that it’s inspired and it’s happy,” Kann said. “Magic happens when we have an inspired team. The pandemic pushed us from a company that is completely in person, based in Sherman Oaks, to (having) employees in four continents.”