PayScale,
Inc., the leading provider of SaaS-based compensation data,
analytics and software, announced today a majority investment from
Francisco Partners, a global technology-focused private equity fund.
This investment will provide PayScale with a new financial partner to
build upon the company’s strong momentum and help continue to drive
product innovation.
PayScale has grown substantially in recent years as employees and
employers alike increasingly demand modern compensation software that
enables more data-driven compensation decisions, leading to greater pay
transparency and equity. The company’s growth has coincided with the
emergence of social movements demanding greater gender and racial
equality (both broadly and with respect to the pay gaps that still
exist), as well as the increasing scrutiny organizations are under to
make their business operations match their recruiting rhetoric. The
Seattle-based company pioneered the use of big data and unique matching
and prediction algorithms to create the industry’s most advanced
compensation platform, which has propelled PayScale to market leadership.
“We have made tremendous progress in delivering our promise to Bring Pay
Forward and in the process have established PayScale as the clear market
and technology leader in SaaS compensation management solutions,”
commented Mike Metzger, Chief Executive Officer of PayScale. “This could
not have been possible without the tireless efforts of our employees to
drive superior customer outcomes and their dedication to contributing to
the PayScale culture. The future of PayScale is bright and we look
forward to welcoming Francisco Partners into the shareholder base.”
“Compensation-related friction continues to affect employers and
employees globally,” said Adam Solomon, Principal at Francisco Partners.
“The changing dynamics of the workforce, including the shift from
Boomers to Millennials as the dominant cohort in today’s workplace and
the entrance of Gen Z, has made it impossible for CEOs to leave
compensation to chance. PayScale helps bridge the disconnect by enabling
its more than 8,000 customers to make compensation decisions that are
more rooted in data and aligned to business goals than ever before. With
this compelling value proposition, PayScale is well-positioned to
capitalize on the large market opportunity ahead of the company.”
Peter Christodoulo, Partner at Francisco Partners, added, “We are
extremely excited to be partnering with PayScale as the company enters
the next chapter of its growth story. The team is focused on its mission
of helping companies align their compensation practices with their
business goals and of easing the burden of communicating well about
compensation to employees, and we look forward to supporting and
furthering that vision.”
Warburg Pincus will be exiting its investment in PayScale in this
transaction. “We are proud of PayScale’s significant growth over the
past five years to become the leading cloud compensation data and SaaS
provider in the space,” said Ashutosh Somani, Managing Director, Warburg
Pincus. “As growth investors, we feel privileged to have partnered with
Mike and the PayScale team and we wish the company continued success in
the future,” added Justin Sadrian, Managing Director, Warburg Pincus.
Raymond James & Associates, Inc. acted as exclusive financial advisor
and Willkie Farr & Gallagher LLP acted as legal advisor to PayScale and
its Board of Directors. Kirkland & Ellis LLP acted as legal advisor to
Francisco Partners. The transaction is subject to customary closing
conditions and is expected to close within the next 15 days.
About PayScale
PayScale offers modern compensation software and the most precise,
real-time, data-driven insights for employees and employers alike. More
than 8,000 customers, from small businesses to Fortune 500 companies,
use PayScale to power pay decisions for more than 23 million employees.
These companies include Dish Network, Getty Images, Skullcandy, Time
Warner, T-Mobile, Macy’s, Sunsweet, UnitedHealth Group, Stihl and
Wendy’s. For more information, please visit: https://www.payscale.com/
or follow PayScale on Twitter: https://twitter.com/payscale.
About Francisco Partners
Francisco Partners is an investment firm that specializes in technology
and technology-enabled services businesses. Since its launch over 19
years ago, Francisco Partners has raised over $14 billion in committed
capital and invested in more than 200 technology companies, making it
one of the most active and longstanding investors in the technology
industry. The firm invests in opportunities where its deep sectoral
knowledge and operational expertise can help companies realize their
full potential. For more information, please visit www.franciscopartners.com.
About Warburg Pincus
Warburg Pincus LLC is a leading global private equity firm focused on
growth investing. The firm has more than $58 billion in private equity
assets under management. The firm’s active portfolio of more than 180
companies is highly diversified by stage, sector and geography. Warburg
Pincus is an experienced partner to management teams seeking to build
durable companies with sustainable value. Founded in 1966, Warburg
Pincus has raised 18 private equity funds, which have invested more than
$74 billion in over 860 companies in more than 40 countries. The firm is
headquartered in New York with offices in Amsterdam, Beijing, Hong Kong,
Houston, London, Luxembourg, Mumbai, Mauritius, San Francisco, São
Paulo, Shanghai and Singapore. For more information please visit www.warburgpincus.com.
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