Tel Aviv-Based Papaya Global Moving Funds out of the Country
On Thursday, global payroll and management unicorn based in Tel Aviv, Papaya Global announced its plans of withdrawing its funds from Israel in their entirety in light of the government’s judicial overhaul.
The chief executive and co-founder of Papaya, Eynat Guez posted on Twitter that the company had decided to withdraw its funding from Israel in light of the statement from Benjamin Netanyahu.
The Prime Minister recently said that they were determined to overhaul the judicial system and Papaya’s CEO said that this was a threat to the democracy as well as the economy of Israel.
Therefore, Guez said that it was apparent that they could no longer engage in international economic activity in the country and had made the decision of withdrawing their funding.
She added that while the step would be painful, it was necessary for them to do so. She did not shed any light on the meaning of the decision, or how it will be implemented in terms of the company’s day-to-day operations.
There were no details about how this would affect the company’s employees in Israel or its tax obligations for that matter.
The judicial overhaul
The proposals put forward by Justice Minister Yariv Levin for altering the judicial system of the country has resulted in country-wide protests in Israel.
Even executives from Israel’s tech and business community took to the streets for voicing their concerns publicly.
The reforms are meant to limit the ability of the High Court of striking down laws and give the Knesset the power to reinstate the legislation struck down by the court.
In addition, they would also give the coalition government of Netanyahu the authority to appoint judges and give ministers the freedom to choose their own legal advisers.
In 2016, Ofer Herman, Ruben Drong and Guez were the three Israeli entrepreneurs who launched Papaya.
The three developed a payment and workforce management software platform, which was developed for different forms of employment.
These included payment, third-party recruiting, contractor work and payroll. The company’s global workforce is 700 strong and the total payroll under management is more than $3 billion.
Papaya conducted a funding round in 2021 in which the company managed to raise $250 million, which saw the company’s valuation reach $3.7 billion.
According to Papaya, it offers its services in more than 140 countries and some of its prominent clients include Wix, Toyota, Microsoft and Intel.
The founding partner of VC firm Group 11, which is based in Los Angeles, Dovi Frances has invested in Papaya and a number of other Israeli firms.
Frances criticized the decision of the payroll and management platform firm of moving its bank deposits from out of Israel.
He said that while the CEO has the authority of managing the finances of the company and the board does not involve itself in such a decision, but it does not mean that it can be used as a political statement or a bargaining chip.
He said that they could not support this move because it would only divide people further.