Francisco Partners Buys Stake in PayScale, Exiting Warburg Pincus

PayScale, a Seattle-based compensation data company, announced Thursday it is selling a majority stake in the business to private equity fund Francisco Partners for an undisclosed amount of funding. The deal terms value PayScale at $325 million, the company says.

People use PayScale to get an idea of how much particular professions and employers pay. The company seeks out salary information from companies through regular surveys, and uses internally developed algorithms to compare its data against other public and private information.

Launched in 2000, PayScale says it currently has 450 employees. The company says it has 8,000 customers, which collectively employ about 23 million people.

Five years ago, another private equity firm, New York-based Warburg Pincus, announced it would make a “majority investment” of up to $100 million in PayScale. Warburg Pincus is exiting its investment in Payscale as part of the deal with Francisco Partners, which is based in San Francisco, according to a news release.

PayScale also lets users track trends like wage growth and employee turnover in different industries. Some observers have argued that making more compensation data available to the public could help job applicants during salary negotiations. Making the job market more transparent might also help to close the gender wage gap; when companies make job offers to both men and women, for the same job, women receive lower salary offers nearly two-thirds of the time, according to San Francisco-based Hired.

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