Unicorn Leaders – Hristo Borisov, CEO & Co-Founder, Payhawk

Hristo expressed gratitude for the invitation to the show and was pleased to share more about Payhawk. He explained that Payhawk is a spend management solution operating in 32 countries. It integrates company expenses and payments into one comprehensive solution aimed at the office of the CFO. This integration allows for homogeneous management of company spending, enhancing the user experience for employees by eliminating the need for expense reports and personal spending. It also provides the finance team with greater control, reducing the need to chase receipts and invoices. Payhawk has offices in eight countries and serves mid-sized enterprises, helping them manage all company expenses directly within their ERP systems using a single product. 

Hristo affirmed that Payhawk remains Bulgaria’s only unicorn, a status they unfortunately still hold. He attributes this to limited access to capital, which is partly due to the smaller addressable market in Eastern Europe. Unlike the vast US market with abundant capital and a larger population, Eastern Europe typically produces companies on a different scale and focus. 

However, Hristo noted a positive trend: the funding gap is narrowing as more capital becomes available across Europe. This is evident from investors in the US, Europe, and the UK increasingly supporting Eastern European companies. Payhawk exemplifies this shift, having attracted international investors by establishing itself as an international business from the start. Serving multinational companies with offices in various locations, Payhawk’s go-to-market strategy targets firms headquartered in the UK, France, Spain, and other Western countries. 

Hristo emphasised that Payhawk has successfully changed investor perceptions. While Eastern European companies are often seen as having strong engineering but weak sales and marketing, Payhawk has combined the best of both worlds, leading to their success. 

Hristo explained that from the beginning, their ambition was to create a large company addressing significant problems in major markets. Being a Bulgarian company presented challenges, particularly in securing the necessary capital. They faced numerous rejections from investors, especially for seed investments, as most investors preferred local companies where they could regularly meet the founders. 

However, Hristo and his team turned this disadvantage into an advantage. The lack of a substantial domestic market pushed them to tackle more difficult problems and adopt a market strategy that did not rely on a physical presence from the start. Even when the company had only 10-12 employees, they had staff in four different countries, fostering an international mindset from the outset. 

This international approach differentiated the company from others, which typically scaled within their local market before expanding internationally. By starting with an international focus, Hristo’s company developed a unique culture and operational strategy that positioned them distinctively in the global market. 

 Hristo described receiving the CEO of the Year award from Forbes Bulgaria in 2022 as a significant moment of pride. He viewed the award not just as a personal achievement but as recognition for the entire business and every employee involved. He emphasised the importance of the team, highlighting that their collective effort was crucial to their success. Hristo also mentioned the company’s attainment of unicorn status, acknowledging it as a notable milestone. However, he stressed that their focus remained on leveraging this success to foster sustainability and add value to the ecosystem. They aimed to bring investors closer and facilitate exchanges of ideas within the Bulgarian investment network. Hristo acknowledged the added responsibilities that come with success and their commitment to sharing and paying it forward over the past two years. 

In discussing funding, Hristo revealed that the business had raised approximately 240 million USD. These funds were primarily invested in research and development (R&D) to build a comprehensive platform that simplifies multiple business processes. Payhawk’s platform replaces various solutions, providing a single system for expense management, invoice processing, purchase orders, and payments across 32 countries. The goal was to enhance user experience and productivity for end-users, offering freedom within a structured framework. Additionally, significant investments were made in establishing physical offices in key global cities to promote collaboration and growth. Hristo noted that, while their office-first culture might not suit everyone, flexible working policies were in place. The company also invested in brand development, including sponsorships like that of top tennis player Grigor Dimitrov, to associate their brand with efficiency, quality, and a superior user experience. 

Hristo explained that the company currently has around 340 employees, with approximately 100 of them working in R&D and engineering to develop the product. In their offices outside of Sofia, teams are dedicated to sales, marketing, brand management, product marketing, and customer success. The G&A and R&D functions are based in Sofia, benefiting from economies of scale and access to top talent. As the first unicorn in Bulgaria, the company enjoys strong employer branding, which aids in talent acquisition. They also leverage local offices to hire sales and marketing talent, gaining traction in specific markets. 

Regarding company culture, Hristo emphasized the interconnectedness of brand, culture, and competitive advantage. The company boasts a strong product DNA and engineering background, addressing complex processes in a fragmented market. Their product integrates seamlessly with existing systems, offering a comprehensive enterprise software solution for finance teams. The company focuses on recruiting tech-savvy individuals who provide excellent customer journeys, ensuring interactions are knowledgeable and finance-focused. 

Hristo highlighted a performance-driven culture, likening it to a professional sports team rather than a family. This involves being aggressive with salaries and hiring top talent, expecting high performance, and maintaining transparency. Employees are kept informed about business decisions, fostering a culture of context over control. This internal culture is reflected externally, shaping the company’s brand. 

Hristo agrees with the importance of transparency and information sharing within a company’s culture. He explains that effective internal communication and employee engagement begin with the leadership team, who are closest to each department. He must stay 120% aligned with his leadership team, as they are the primary spokespeople on the ground. 

Hristo provides monthly updates to all employees, discussing business performance, challenges, opportunities, and team initiatives. Quarterly company-wide events are also important, including twice-yearly gatherings: a winter team-building event in Bansko, Bulgaria, and a summer retreat at the Bulgarian seaside. These events help ensure alignment and visibility of the leadership team. 

Additionally, Hristo spends a significant amount of time visiting different offices to maintain a connection with employees on the ground. 

When asked about the relevance of the term “unicorn” in the current business landscape, Hristo notes that the expectations and scale of the first unicorns were different. He mentions new terms like “dec acorns” and “Pegasus” (profitable unicorns) and highlights the current focus on profitable unit economics and sustainable growth. He believes that the term “unicorn” might evolve, but the critical discussion is about companies’ success in public markets and their ability to justify venture capital investments. 

Regarding the partnership with tennis player Grigor Dimitrov, Hristo explains that they considered the relevance of Dimitrov’s audience to their B2B business and found a good cultural fit. Dimitrov’s qualities of efficiency, grace, and kindness align well with their brand. The partnership was well-received, symbolising the collaboration between Bulgaria’s top tennis player and its first unicorn. Hristo values the multinational exposure Dimitrov brings, which complements their global brand. Despite Dimitrov’s recent injury at Wimbledon, Hristo remains hopeful for his swift return to the tour. 

Hristo explained that they are seeing an impact, particularly with improved brand recognition. For instance, during a recent call with the CFO of a Croatian company, the CFO mentioned he was a fan of tennis and praised their association with Grigor. This recognition is crucial in the payments and financial services industry, where trust is paramount. Being a well-known brand adds value compared to lesser-known competitors. Besides, their regulated status in Lithuania and the UK further bolsters trust. This enhanced brand perception is evident in both employee attraction and customer recognition. 

Regarding AI, Hristo emphasised that it presents a significant opportunity but also a challenge in staying updated with innovations. They use AI pragmatically, integrating it into their data extraction engine to read invoices in 60 languages and even handle handwritten receipts. AI also helps classify email invoices and supports the finance team with insights and trend analysis. They aim to use AI for practical purposes rather than as a mere buzzword, focusing on substance over hype. 

Hristo shared Payhawk’s plans for the next 12 to 18 months. They aim to expand their offerings to more currencies and countries, recently launching credit services in 32 countries, including US credit cards from Europe. They are also enhancing their software capabilities, with new advanced AP modules for purchase ordering and real-time budget management tools. Their goal is to dominate the mid-size and enterprise market in Europe, aiming for over 60% market share. They pride themselves on strong market win rates and high customer satisfaction, with support response times averaging 37 seconds. Their focus remains on continuous innovation and maintaining a cohesive platform.