Rapyd raises $300M on a $2.5B valuation to boost its fintech-as-a-service API – TechCrunch

A wave of organizations – driven by the circumstances of the global Kovid-19 epidemic – are stepping up their commercial and financial interactions online, and today is one of the big players helping to enable that shift to expand tools and services Announces an important round of development financing to them.

Rapid, Which provides an API-based “fintech-as-a-service” platform to cover payments, banking services, fraud protection and more, has raised $ 300 million, funding that CEO and co-founder Aric Schtilman said that would be used in an interview. Expand your team, build more technology (next: expanded fraud ID services and a broader market), and to make selected acquisitions.

Rapid’s customer base now numbers about 5,000 businesses, including marketplaces (labor markets, and marketplaces for goods), e-commerce businesses, other types of lenders, and any business that deals in its broader offerings or new financial services. Want to include. Shtilman said that at the moment, Rapyd is seeing its strongest growth yet, onboarding about 500 new customers each week.

The funding is coming in at a post-money valuation of $ 2.5 billion, Shtilman confirmed. (For some reference to that, Rapid was ultimately valued at $ 1.2 billion December 2019.)

The round is a Series D and led by the prolific growth-round VC Cottage with Spark Capital, AVD Ventures, FJ Labs, and Latitude (all new backers) and General Catalyst, Oak FT, Tiger Global, Target Global, Durable Capital. , Taal Rajdhani, and Pravesh Rajdhani (all previous rear) are also participating. Other previous investors, in particular, Include Stripe, another major player in the API based financial services world.

Like other companies, which have seen a huge increase in demand for financial services in the past year – and especially services that are capable of transacting online via the Internet or phone – some have proved to be the most mandatory and Most commonly used. (And no wonder, because bills still need to be paid, food and other items still need to be bought, debt is still very much needed, and so on)

In particular, this was what many calls and “opportunists” would pick up, not to keep the lights on or to extend the runway, but because those money were being offered on good terms, and were smart places where It could be used to develop business.

“We were not planning to raise money to raise this round, but when the epidemic started coming to our business,” Schtilman said. After completing our 2021 development plans in three months in 2020, we were approached by existing investors to go beyond our original business plans. So we thought the time was probably right for world domination. “

Shtilman was partially (only partially) joking – he has a kind of deadpan delivery that I can’t catch here – but it’s far from the early days of startup, when “no one wants to invest Was becauseveryone thought it would be very difficult to execute. Even our early investors advised us to focus on the small concept. But we thought that globally construction does not work to start small. It is against the idea. There is a need to explain over the last several years and we have almost disappeared. “

The challenge (and opportunity) to identify Rapid in 2017 when it first opened for business, global commerce and financial markets are much more fragmented: consumers and businesses in individual markets have their preferred payment methods and demand, rules aside, And major companies include individual by country.

Meanwhile, APIs have long been a great tool for integration and connection: using a few lines of code – and having your own services built on code as well – you can weave services together, and commoditized functionality. Which can take ages to build. To focus on making your core business more unique, prepare the ground to reduce the effort and work required.

While Stripe, Twilio, and many other companies would have identified opportunities to leverage APIs that could scale a world of functionality for a wider group of customers, Rapid really recognized and built it, not just one. , The idea was to load two. , Or three services, but hundreds (even thousands) of the features in that offer. The idea is smart and, as Shiltman noted, taking into account the economies of scale that exist in e-commerce and fintech: individual transactions are very incremental at the end of the day, so services that bring many together will ultimately Can begin. Imagine interesting returns.

It is, of course, nothing to identify and run with Rapid. That is to say, the company now has many competitors in the market. Just last week, Germany-based Mambo, which offers an API-based suite of services (7,000 at the last count), under the idea of ​​”banking as a service”. Raised $ 135 million at more than $ 2 billion valuation. strip, A backer from Rapid, has also continued to expand and add to many services well beyond payments. Thought machine Also picked up a big round last year; Temenos And italy Edera There are strong players here too. And the region has so much opportunity that it is also attracting many new entrants: Sakshi Unit, Another interesting player that Theft came out in the US in December With an interesting list of our own backers.

“Building infrastructure doesn’t matter whether you’re a little mom and pop or something big, you need many things, and if you want to sell in more than one jurisdiction, you need those services a lot. , “Shtilman explained its need for scale and breadth in the Fintech platform proposal. He is also very much about competition. “They have emerged like mushrooms after the rain. But if you don’t have competition then it means you don’t have any business so that’s good. This means that it is in great demand. But for now we are the market leaders. We think we will become AWS of this place. “

This is why investors like Kotyu are also descending.

“The payment landscape varies dramatically across countries. A company doing business globally may need to accept hundreds of local payment methods. Rapids API, which removes this complexity, is currently the power that we think many of the world’s most exciting companies have, ”said Chris Fredrickson, managing partner at CoTE. “We are honored to partner with Eric and the team for the next leg of the rapid journey.”