This article is part of Fintech Leaders, a newsletter with 80,000+ builders, entrepreneurs, investors, regulators, and students of financial services. I invite you to share and sign up. If you enjoy this conversation, please consider leaving a review on Apple, Spotify, or Youtube.
I sat down with Eynat Guez, CEO and Founder of Papaya Global. She has built an HR and payroll platform that has transformed how companies manage and operate global teams across 180 countries. After having faced over 1,000 rejections from VCs, Papaya has now grown to process $34 billion in payments annually and they've raised significant funding from Insight Partners, Bessemer, Greenoaks Capital, and more.
We discuss why brutal honesty and direct leadership creates stronger companies, how founders need to learn "investor language" to sell the company vision rather than the product, the operational complexity of building global from day one across 160 countries, and how being a mother of three shaped her approach to building a hypergrowth company.
Q&A With Eynat Guez
The following is a summarized transcript of the interview
Miguel Armaza: You built two services businesses before Papaya. What was the biggest mindset shift you had to make when entering the tech world?
Eynat Guez: I'm still getting used to it. There are still a lot of different lessons, honestly. In services, every day you end the day and you execute something. Every day is eventually a day that you create real value that needs to sum up to revenues, because otherwise it's not going to make sense.
In tech, the way you're looking at things is how do you eventually work on things, create an aggregated value for the long run, and then do things on a larger scale? It's a very big mindset change. It's a very big change in the way you're designing things, planning things. In tech, you're building for scale, you're building for growth, therefore you need to be much more planned. But having said that, always keeping the framework of time, because it's very easy to let time slip away.
Miguel Armaza: You raised less than $3 million in your first three years and faced over 1,000 rejections from investors. How did you persist through that?
Eynat Guez: I had one thesis: as long as I have clients that are willing to pay for the services, eventually we will raise funds. When we raised Series A eventually, we were already running $7 million in annual revenue. I didn't even realize that it was a lot for the stage we were at because for me, it was all about building and proving to investors that what we are building actually has value.
I think when we told the story to investors at the beginning, they understood it, but then they went and asked the CEOs of their portfolio companies, "Do you have any payroll problem?" And they said, "No, everything is great." Because honestly, CEOs don't know what's going on behind the scenes of payroll. We should have guided them directly to the CFOs.
Miguel Armaza: What's the most important lesson you learned about dealing with investor rejection?
Eynat Guez: No doesn't mean that the investor is your enemy. I have a lot of investors that we are staying in very good contact with that said no to me multiple times. The majority of them were kind enough to give me feedback. Sometimes I didn't agree with the feedback. But many of their feedbacks actually helped me to be ready and prepared and to build better.
That's a very much healthier approach. It builds better relationships with investors, even the ones that did not invest. They will be very good ambassadors for your future if you remain in good connections with them.
Miguel Armaza: What was it about your Series A round that finally clicked with investors?
Eynat Guez: What they realized is that we had great client base, great client retention, and obviously great upsells as well. All of the metrics were actually very good. But what I learned is that when I step into their room to secure funds, I need to speak in their language. They are not here to buy my product. They are here to understand why customers are buying my products and what are the revenue metrics.
When you're stepping into a room with investors, you are not selling the product, you are selling the company. You are selling the future promise of this company in the financial market. If they don't understand how those $5 million can become $50 or $500 million if they're super lucky, this will not happen.
Miguel Armaza: What does it mean to build a truly global company from day one?
Eynat Guez: It means a lot of hard work. The decision from day one was that if we cannot support—we started with 80 countries, we grew very quickly to 160 countries—we cannot support a product on 80 countries, we are not going live. You need to have a lot of localization, a lot of knowledge. You need to understand how you are consolidating the experience in so many different locations.
This is very strong in our DNA. Even today on the payment side, when we are launching something, we say no, we want to assure that we hold multiple licenses. We can work on multiple regions and geos from day one, because if we cannot deliver the global experience for our clients, this is going to start breaking.
Miguel Armaza: Can you explain your acquisition of Azimo and how you've developed your payment infrastructure?
Eynat Guez: We realized that the last mile of payment is super important and super critical. If we're going to solve it well, this is much bigger than just being a payroll or employment company. All the payment companies across the globe and all of the banks only guarantee when the money is going to leave their bank account. They will never take liability on when the money is going to land on the other side.
The average time to send funds from country to country is still 18 hours. Within this 18 hours, the money is exchanging hands, and you lose track. When we started with payment, we said we want to look at our mission statement from the end—the last mile. We want to know when we are delivering the funds. How can we commit to deliver those funds on a very specific date?
Miguel Armaza: You're known for your direct leadership style. Has this approach ever gotten you in trouble?
Eynat Guez: The short answer is yes, for sure. It's always easier not to say things than to say things, because when you say things, you need to stand behind them or justify them. But I do believe that we need to be honest with each other in the best way possible. It's not about being abusive or disrespectful, it's about trying to be very candid with people and not telling them things just because it's the easiest path.
The worst thing founders can do is when somebody says no to them, they take it very personally. For me, no from investors, like no from a client, it's a challenge. I need to convert them. I need to explain why this is actually something they really need to participate in or invest in.
Miguel Armaza: How has the structure of Papaya evolved as you've grown, and how do you stay efficient?
Eynat Guez: There is no one design that you're doing and then you just hit the road. I always say that a startup in a hyper-growth company is exactly like raising my kids. Every summer, you're going to go to their closet, and you're going to get their shirts from last year, and it's going to be too small. You know that you need to change everything.
Every year in Papaya is a completely different company. It's a completely different mission and vision. This means that you constantly need to look at your design, your leadership. Are they able to take you to the next level? I'm constantly looking, challenging myself: Do I think that generally speaking, somebody else can do a better role? I don't have an ego. I want the company to be successful. I don't want to be the CEO of a failed company.
Miguel Armaza: You're a mother of three. How has parenthood shaped your approach to entrepreneurship?
Eynat Guez: If you ask my kids, I'm a mother of four. Papaya is their older sister. Each one of them, Papaya was probably the second or third word that they knew how to say when they were babies. They always know that Papaya gets priority over their needs the majority of the cases.
At least once a month, I get asked by someone if I can advise a female founder that found out she's pregnant and doesn't know how to handle this with investors. Pregnancy is always the most vulnerable place of every female that I've ever met. All of a sudden, we feel that this is what's defining us.
I always tell them to think about it rationally. We all chose to be founders and we all chose to be mothers. I build the best contingency plan for myself when I'm pregnant because I literally sit down and map everything that I'm in charge of. I always try to bring my kids to be part of my career. When I'm Zooming with people, they can come say hi. It makes them feel part of it.
Miguel Armaza: Why does the corporate world still get pregnancy so wrong?
Eynat Guez: People look at their own experience with their kids, the challenges they had. Yes, it's tough and demanding. But deciding to be an entrepreneur is tough and demanding too. Actually, it's a really good signal from my perspective. If people can do that with kids in their background, you can trust them that they will know how to handle even bigger problems.
Women that choose to have careers will always find the best way to navigate because this is their choice. We need to look at pregnancy and parenthood from a less judgmental point. There are lots of fair solutions currently.
Miguel Armaza: What's your vision for the future of work and Papaya's role in it?
Eynat Guez: We live in a very interesting and transformative period. Since COVID, people are asking themselves: Where should I live? Who should I pay taxes for? Which currency should I hold? Nothing is obvious. People are living in multiple currencies, taking decisions that are very different than just one geo or one job.
The rise of freelancers, contingent workforce, gig economy, global mindset is really transformative. People want to be more global, to be digital nomads, to work from wherever they want. But compliance regulation and everything else is actually going against them.
I heard Elon Musk say that wealth is not going to be a problem any longer—everyone's going to have enough access to wealth because AI will allow this. If money is not a real problem, this creates a very different kind of mindset. For us, basically reinventing services on the bank side or the financial side, just access to funds better, better financial decisions—this is what we are very busy with.
This interview has been edited for length and clarity.
Want more podcast episodes? Join me and follow Fintech Leaders today on Apple, Spotify, or your favorite podcast app for weekly conversations with today’s global leaders that will dominate the 21st century in fintech, business, and beyond.
Previous Episodes You May Enjoy:
Share this post