Article by Jonathan Shieber for TechCrunch on April 24, 2014
Making its fourth acquisition of a technology company in fewer than three weeks, private equity investment firm Warburg Pincus is announcing that it has bought compensation software services vendor PayScale in a deal worth up to $100 million.
In the 14 years since its launch in 2000, PayScale has developed a massive database of individual compensation profiles, containing salary information on 40 million jobs, to provide a snapshot of current market salaries through software available online.
The Seattle-based company has over 3,000 enterprise subscriptions in 13 countries, and those businesses are using PayScale’s software to make salary decisions for more than 2 million employees, according to a release from the company.
Since March, Warburg Pincus has bought PayScale; spent over $1 billion to acquire Electronic Funds Source, a corporate payments solutions business; Mercator, the Dubai-based information technology developer providing logistics services like luggage tracking for airlines; and Liepin.com, a Chinese online job recruitment service.
Money from the Warburg Pincus buyout of PayScale will be used to support marketing and sales initiatives and new hires, according to a statement from the company.
“It’s a large and growing addressable market with small- and medium-sized businesses,” writes Warburg Pincus spokesman Ed Trissel, in an email. “It’s also a disruptive, crowd source solution in an industry that has traditionally relied on third-party data.”
Since its launch, PayScale had raised over $33 million from investors including Montlake Capital, Madrona Venture Group, Fluke Venture Partners, Trinity Ventures, Allen & Co., and SAP Ventures.
Raymond James & Associates served as financial adviser to PayScale.