FinTech: GoCardless Within Kissing Distance Of Unicorn Status
British fintech GoCardless raised $95 million, unexpectedly.
GoCardless, a British fintech that processes direct debit and recurring payments for business customers, has raised $ 95 million in a round led by Bain Capital’s venture capital arm. The latest round valued the start-up at $ 970 million. That’s a hair’s breadth away from the coveted unicorn benchmark of $ 1 billion. (CNBC)
The firm counts the venture capital investment arms of Alphabet (NASDAQ: GOOGL) and Salesforce (NYSE: CRM) among its existing investors.
COVID-19 boosts business
The pandemic triggered a huge shift towards digital payments and GoCardless benefited from the trend.
“2020 has been a tumultuous year with a lot going on,” GoCardless CEO and co-founder Hiroki Takeuchi told CNBC. “But we’ve actually been growing through this period quite successfully and showing a lot of business resilience in what we’ve built.”
Revenues surged 46% year-on-year in the month of November, though the firm did not disclose the actual sum. Annually, it processes about $ 18 billion of payments across 30 countries for 55,000 customers.
Takeuchi said the current funding round was unplanned. “We thought that we would raise money next year,” he told CNBC.
Anyways, the company will use the funds for further development of its “open banking” platform for payments.
Its vision: a payments platform that is able to take money from customers’ accounts directly and instantly, without routing through intermediaries such as card networks.
Last week, Tink, an innovative open banking platform from Sweden mopped up additional funding of € 85 million in a round led by Eurazeo Growth. Daniel Kjellén, co-founder and CEO of Tink, said on the occasion that open payments powered by open banking had taken off in 2020. He said he expected the trend to further scale up in 2021, predominantly in the UK, and thereafter in Europe.
Matt Harris, a partner at Bain Capital Ventures that led GoCardless’s latest round, told CNBC: “As we see the chessboard, the real opportunity is in these new types of payment — huge flows where a card is not the best instrument.”
Related Story: IBM, GoDaddy Snap Up Fintechs
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