Papaya Raises $50M to Revolutionize Bill Payment with Mobile App

The Hassle-Free Future of Bill Payment

The process of settling financial obligations is rarely enjoyable. Consequently, any technological advancement designed to streamline this task is generally well-received.

Introducing Papaya: A New Approach to Bill Payments

Papaya, a startup headquartered in Los Angeles, is dedicated to simplifying bill payment procedures. The company has created a system that allows individuals to pay bills through methods beyond conventional approaches like postal mail, phone calls, or web portals.

Their mobile application empowers users to capture an image of any bill. Subsequently, its artificial intelligence-driven “bill-understanding technology” ensures accurate payment processing, following user-provided payment information.

Demonstrating the Technology's Capabilities

During a Zoom demonstration, CEO and co-founder Patrick Kann showcased the app’s functionality. Even with a bill fragmented into several pieces, Papaya’s application successfully scanned the necessary invoice details to facilitate payment.

“Provided a biller accepts electronic payments, our app enables anyone to submit payments,” Kann stated. “This represents a genuinely universal payment solution.”

Inspiration from Brazil

Kann’s inspiration for Papaya stemmed from his upbringing in Brazil, where comparable payment technology was already prevalent.

“Individuals in my home country were surprised to learn that we lacked similar capabilities here,” Kann explained. “The U.S. has been an outlier in this regard, with only 3% of bills being settled via mobile devices. We identified a significant market opportunity in mobile bill payments.”

The Team Behind Papaya

Kann collaborated with computer vision scientist Jason Meltzer, who previously spearheaded the computer vision technology development for the Roomba at iRobot, to establish Papaya.

The company’s core objective is to alleviate the stress associated with bill payments for Americans by providing a convenient mobile solution. They also aim to assist businesses, governments, and municipalities of all sizes in receiving payments more rapidly and consistently.

Securing Series B Funding

Papaya has announced a $50 million Series B funding round, led by Bessemer Venture Partners, with participation from Sequoia Capital, Acrew Capital, 01 Advisors, Mucker Capital, Fika Ventures, F-Prime and Sound Ventures. This investment brings the company’s total funding to $65 million since its founding in 2016.

Currently, Papaya processes payments for “hundreds of thousands” of businesses and organizations, serving millions of users across the U.S. Beyond the mobile app, the company integrates with partner billing systems through embedded widgets and traditional paper statements.

The company intends to expand upon its existing technology with a comprehensive product development roadmap.

Early Growth Strategies

Papaya’s initial growth involved innovative promotional tactics. Kann personally distributed stickers featuring Papaya’s QR code on parking tickets in Las Vegas. The city subsequently incorporated the QR code onto their paper notices. The company also partnered with medical practices to offer the payment option to patients.

Kann emphasizes the diversity of his 80-person team, comprised of 60% underrepresented minorities, and a product engineering team that is 45% female.

Organic Growth and Future Plans

The company’s growth has been “completely organic,” achieved without a dedicated marketing team, according to the CEO.

“Our customer acquisition cost is notably lower compared to many other fintech companies,” he noted.

However, a portion of the new capital will be allocated to increasing brand awareness and expanding the team.

While Kann refrained from disclosing specific revenue figures, he indicated that Papaya is “on track to acquire 1 million new active users annually.”

The Company’s Revenue Model

The application is available to users at no cost, and Papaya does not impose any additional fees on merchants. Instead, the company generates revenue through a percentage of interchange fees that merchants incur when processing credit card transactions.

Investor Confidence

Charles Birnbaum of Bessemer Venture Partners stated that his firm has been closely monitoring Papaya since personally experiencing the benefits of its “magical” bill pay application.

“It is uncommon to encounter a business that not only significantly improves the experience for millions of consumers by simplifying a frustrating process but also addresses a critical challenge for businesses across various sectors, including healthcare and utilities,” he said. “We are confident that the Papaya bill pay experience will become a standard expectation within the consumer financial services industry in the coming years.”