Quick Take
By acquiring Teampay, Paystand will be able to offer a larger suite of software solutions, including expense management, direct deposit management and accounts receivable automation. Adding Teampay’s network of 250,000 companies to Paystand’s own network of about 800,000 will give the combined company a network of more than 1 million.
Scotts Valley-based Paystand marked another step in its journey to become “the Venmo of business-to-business payments” with last week’s acquisition of Teampay, a New York City-based company focused on purchasing software for businesses.
With Teampay, Paystand will be able to offer a larger suite of software solutions, including expense management, direct deposit management and accounts receivable automation. Adding Teampay’s network of 250,000 companies to Paystand’s own network of about 800,000 will give the combined company a network of more than 1 million.
That expansion is key to CEO and founder Jeremy Almond’s mission to build an industry-wide decentralized finance (DeFi) network. Put simply, DeFi is a way to finance without relying on third-party intermediaries like banks and brokers. Using technology like blockchain, cryptocurrency and peer-to-peer networks, it enables payment transactions to be made more directly and affordably. Cutting out traditional financial institutions can eliminate things like processing fees and, according to proponents, helps to democratize financial systems.
With Paystand’s blockchain-based technology, companies can do things like pay vendors directly without having to mail them a paper check or automate payments for recurring bills. And that means payments can typically be received faster as neither payee or recipient has to wait for a bank to process it, which often adds additional time – and sometimes, fees.
Reducing reliance on traditional financial systems was a major goal for Almond. Before founding the company in 2014, he was living in New York City working in various tech roles when the 2008 financial crisis hit – and his family was one of many around the country who lost their home as a result.
“It was a real catalyst moment for feeling that our economy and our banking system, the things that we had put trust in, had fundamentally let us down,” said Almond, who was also inspired by the Occupy Wall Street movement, the fall 2011 protest against economic inequality that spurred similar protests around the country, including in Santa Cruz.
He decided to go back to graduate school, getting a master’s degree in business administration from UMass Amherst and leaving with a desire to transform and democratize financial services. After moving back to his native California, he started Paystand to help companies change the way they did things like paying vendors. Almond grew up around the state and knew he wanted his business to be near Silicon Valley; as an avid surfer, Santa Cruz appealed to him.
Many of these companies “historically operate in a legacy, old-school banking infrastructure [using] wire transfers or paper checks or networks that were designed in the 1970s,” he said. “We help them save on costs from bank fees and credit card fees, to help them grow and be more successful and be more competitive, so our economy can ultimately be more fruitful instead of being taxed by a financial industry that’s fundamentally let us down.”
Today, Paystand has become the largest and fastest blockchain-enabled payment network for businesses, and it has raised more than $90 million from investors. The company employs over 300 people in seven offices across the United States and in Mexico, with just over 30 based at its Scotts Valley headquarters.
Its customers span sectors from higher education to manufacturing, health care and insurance, with a focus on what Almond described as “midsized, high-growth companies that are generally producing real things that grow our economy.” That includes customers like Santa Cruz-based Allterra Solar, a San Francisco-based vintage toy company called Super7, and Eden Equipment, which manufacturers air and water filtration systems.
Also key to the company’s adoption has been its ability to integrate with other business software that companies are already using. Earlier this year, Paystand announced new integrations with Acumatica, an enterprise resource planning tool, accounting software provider Sage Intacct, and Microsoft Dynamics 365, which provides a suite of business software tools. Teampay is Paystand’s second acquisition; in 2022, it acquired Yaydoo, an accounts payable company headquartered in Mexico.
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