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Originally published April 24, 2014 at 2:30 PM | Page modified April 24, 2014 at 5:02 PM

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PayScale lands $100M from Warburg Pincus

Seattle-based PayScale, which provides compensation data, announced an investment of up to $100 million Thursday to recapitalize the company and fund growth initiatives.


Seattle Times business reporter

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Seattle-based PayScale, which provides compensation data, announced Thursday that it is receiving an investment of up to $100 million to recapitalize the company and fund growth initiatives.

The investment came from an affiliate of Warburg Pincus, a leading global private equity firm focused on growth investing. A portion of the $100 million will be used to buy equity from current shareholders, giving Warburg a majority share in the company.

PayScale, founded in 2000, has a database that contains more than 40 million salary profiles and provides information on current salaries through use of online tools and software.

“This investment validates PayScale’s position as the leading compensation data and SaaS [software as a service] provider enabling businesses to attract, retain and optimize the return on their most important assets, their people,” Mike Metzger, president and CEO of PayScale, said in a statement. “By leveraging Warburg Pincus’ expertise, experience and growth capital, we will be able to enhance our product offerings and accelerate our growth.”

PayScale, which currently has 135 employees, plans to continue building its sales and marketing team, as well as bring on more staff to the product-development team.

“At the end of the day, the bulk of the growth is adding people to the team,” Metzger said.

Since 2004, PayScale has had four funding rounds, raising more than $30 million. Seattle-based Madrona Ventures has participated in each of the previous funding rounds, and managing director Matt McIlwain said the latest investment helps the Seattle tech scene.

PayScale is “poised to disrupt a key market in human capital management, one of the hottest areas of growth in business software right now,” he said in a statement.

PayScale marks the third time New York-based Warburg Pincus has invested in a Seattle technology company. The company invested in Cobalt in 2001 and A Place For Mom in 2010.

“While I’m based in San Francisco, we’ve been spending a ton of time of late on tech companies outside of the [Silicon] Valley,” said Justin Sadrain, managing director at Warburg Pincus in San Francisco. “For us, a lot of the interesting stuff is happening in places other than the valley — particularly in the Seattle market.”

Coral Garnick: 206-464-2422 or cgarnick@seattletimes.com. On Twitter @coralgarnick



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