stripe
Auto Added by WPeMatico
Nuula raises $120M to build out a financial services ‘super app’ aimed at SMBs
A Canadian startup called Nuula that is aiming to build a super app to provide a range of financial services to small and medium businesses has closed $120 million of funding, money that it will use to fuel the launch of its app and first product, a line of credit for its users.
The money is coming in the form of $20 million in equity from Edison Partners, and a $100 million credit facility from funds managed by the Credit Group of Ares Management Corporation.
The Nuula app has been in a limited beta since June of this year. The plan is to open it up to general availability soon, while also gradually bringing in more services, some built directly by Nuula itself but many others following an embedded finance strategy: business banking, for example, will be a service provided by a third party and integrated closely into the Nuula app to be launched early in 2022. Alongside that, the startup will also be making liberal use of APIs to bring in other white-label services, such as B2B and customer-focused payment services, starting first in the U.S. and then expanding to Canada and the U.K. before expanding further into countries across Europe.
Current products include cash flow forecasting, personal and business credit score monitoring, and customer sentiment tracking; and monitoring of other critical metrics including financial, payments and e-commerce data are all on the roadmap.
“We’re building tools to work in a complementary fashion in the app,” CEO Mark Ruddock said in an interview. “Today, businesses can project if they are likely to run out of money, and monitor their credit scores. We keep an eye on customers and what they are saying in real time. We think it’s necessary to surface for SMBs the metrics that they might have needed to get from multiple apps, all in one place.”
Nuula was originally a side-project at BFS, a company that focused on small business lending, where the company started to look at the idea of how to better leverage data to build out a wider set of services addressing the same segment of the market. BFS grew to be a substantial business in its own right (and it had raised its own money to that end, to the tune of $184 million from Edison and Honeywell). Over time, it became apparent to management that the data aspect, and this concept of a super app, would be key to how to grow the business, and so it pivoted and rebranded earlier this year, launching the beta of the app after that.
Nuula’s ambitions fall within a bigger trend in the market. Small and medium enterprises have shaped up to be a huge business opportunity in the world of fintech in the last several years. Long ignored in favor of building solutions either for the giant consumer market, or the lucrative large enterprise sector, SMBs have proven that they want and are willing to invest in better and newer technology to run their businesses, and that’s leading to a rush of startups and bigger tech companies bringing services to the market to cater to that.
Super apps are also a big area of interest in the world of fintech, although up to now a lot of what we’ve heard about in that area has been aimed at consumers — just the kind of innovation rut that Nuula is trying to get moving.
“Despite the growth in services addressing the SMB sector, overall it still lacks innovation compared to consumer or enterprise services,” Ruddock said. “We thought there was some opportunity to bring new thinking to the space. We see this as the app that SMBs will want to use everyday, because we’ll provide useful tools, insights and capital to power their businesses.”
Nuula’s priority to build the data services that connect all of this together is very much in keeping with how a lot of neobanks are also developing services and investing in what they see as their unique selling point. The theory goes like this: banking services are, at the end of the day, the same everywhere you go, and therefore commoditized, and so the more unique value-added for companies will come from innovating with more interesting algorithms and other data-based insights and analytics to give more power to their users to make the best use of what they have at their disposal.
It will not be alone in addressing that market. Others building fintech for SMBs include Selina, ANNA, Amex’s Kabbage (an early mover in using big data to help loan money to SMBs and build other financial services for them), Novo, Atom Bank, Xepelin and Liberis, biggies like Stripe, Square and PayPal, and many others.
The credit product that Nuula has built so far is a taster of how it hopes to be a useful tool for SMBs, not just another place to get money or manage it. It’s not a direct loaning service, but rather something that is closely linked to monitoring a customers’ incomings and outgoings and only prompts a credit line (which directly links into the users’ account, wherever it is) when it appears that it might be needed.
“Innovations in financial technology have largely democratized who can become the next big player in small business finance,” added Gary Golding, General Partner, Edison Partners. “By combining critical financial performance tools and insights into a single interface, Nuula represents a new class of financial services technology for small business, and we are excited by the potential of the firm.”
“We are excited to be working with Nuula as they build a unique financial services resource for small businesses and entrepreneurs,” said Jeffrey Kramer, Partner and Head of ABS in the Alternative Credit strategy of the Ares Credit Group, in a statement. “The evolution of financial technology continues to open opportunities for innovation and the emergence of new industry participants. We look forward to seeing Nuula’s experienced team of technologists, data scientists and financial service veterans bring a new generation of small business financial services solutions to market.”
Powered by WPeMatico
Ramp and Brex draw diverging market plans with M&A strategies
Earlier today, spend management startup Ramp said it has raised a $300 million Series C that valued it at $3.9 billion. It also said it was acquiring Buyer, a “negotiation-as-a-service” platform that it believes will help customers save money on purchases and SaaS products.
The round and deal were announced just a week after competitor Brex shared news of its own acquisition — the $50 million purchase of Israeli fintech startup Weav. That deal was made after Brex’s founders invested in Weav, which offers a “universal API for commerce platforms.”
From a high level, all of the recent deal-making in corporate cards and spend management shows that it’s not enough to just help companies track what employees are expensing these days. As the market matures and feature sets begin to converge, the players are seeking to differentiate themselves from the competition.
But the point of interest here is these deals can tell us where both companies think they can provide and extract the most value from the market.
These differences come atop another layer of divergence between the two companies: While Brex has instituted a paid software tier of its service, Ramp has not.
Earning more by spending less
Let’s start with Ramp. Launched in 2019, the company is a relative newcomer in the spend management category. But by all accounts, it’s producing some impressive growth numbers. As our colleague Mary Ann Azevedo wrote:
Since the beginning of 2021, the company says it has seen its number of cardholders on its platform increase by 5x, with more than 2,000 businesses currently using Ramp as their “primary spend management solution.” The transaction volume on its corporate cards has tripled since April, when its last raise was announced. And, impressively, Ramp has seen its transaction volume increase year over year by 1,000%, according to CEO and co-founder Eric Glyman.
Ramp’s focus has always been on helping its customers save money: It touts a 1.5% cash back reward for all purchases made through its cards, and says its dashboard helps businesses identify duplicitous subscriptions and license redundancies. Ramp also alerts customers when they can save money on annual versus monthly subscriptions, which it says has led many customers to do away with established T&E platforms like Concur or Expensify.
All told, the company claims that the average customer saves 3.3% per year on expenses after switching to its platform — and all that is before it brings Buyer into the fold.
Powered by WPeMatico
Former Snap employees raise $9M for Trust, emerging from beta to level marketing playing field
Trust wants to give smaller businesses the same advantages that large enterprises have when marketing on digital and social media platforms. It came out of beta with $9 million in seed funding from Lerer Hippeau, Lightspeed Venture Partners, Upfront Ventures and Upper90.
The Los Angeles-based company was started in 2019 by a group of five Snap alums working in various roles within Snap’s revenue product strategy business. They were building tools for businesses to fund success with digital marketing, but kept hearing from customers about the advantage big advertisers had over smaller ones — the ability to receive good payment terms, credit lines, as well as data and advice.
Aiming to flip the script on that, the group created Trust, which is a card and business community to help digital businesses navigate the ever-changing pricing models to market online, receive the same incentives larger advertisers get and make the best decision of where their marketing dollars will reach the furthest.
Trust dashboard
Trust does this in a few ways: Its card, built in partnership with Stripe, enables businesses to increase their buying power by up to 20 times and have 45 days to make payments on their marketing investments, CEO James Borow told TechCrunch. Then as part of its community, companies share knowledge of marketing buys and data insights typically reserved for larger advertisers. Users even receive news via their dashboard around their specific marketing strategy, he added.
“The ad platforms are walled gardens, and most people don’t know what is going on inside, so our customers work together to see what is going on,” Borow said.
The growth of e-commerce is pushing more digital marketing investments, providing opportunity for Trust to be a huge business, Borow said. E-commerce sales in the U.S. grew by 39% in the first quarter, while digital advertising spend is forecasted to increase 25% this year to $191 billion. Meanwhile, Google, Facebook, Snapchat and Twitter all recently reported rapid growth in their year-over-year advertising revenues, Borow said.
The new funding will go toward increasing the company’s headcount.
“We have active customers on the platform, so we wanted to ramp up hiring as soon as we went into general release,” he added. “We are leaving beta with 25 businesses and a few hundred on our waitlist.”
That list will soon grow. In addition to the funding round, Trust announced a strategic partnership with social shopping e-commerce platform Verishop. The company’s 3,500 merchants will receive priority access to the Trust card and community, Borow said.
Andrea Hippeau, partner at Lerer Hippeau, said she knew Borow from being an investor in his previous advertising company Shift, which was acquired by Brand Networks in 2015.
When Borow contacted Lerer about Trust, Hippeau said this was the kind of offering that would be applicable to the firm’s portfolio, which has many direct-to-consumer brands, and knew marketing was a huge pain point for them.
“Digital marketing is important to all brands, but it is also a black box that you put marketing dollars into, but don’t know what you get,” she said. “We hear this across our portfolio — they spend a lot of money on ad platforms, yet are treated like mom-and-pop companies in terms of credit. When in reality Casper is outspending other companies by five times. Trust understands how important marketing dollars are and gives them terms that are financially better.”
Powered by WPeMatico
Paystand banks $50M to make B2B payments cashless and with no fees
It’s pretty easy for individuals to send money back and forth, and there are lots of cash apps from which to choose. On the commercial side, however, one business trying to send $100,000 the same way is not as easy.
Paystand wants to change that. The Scotts Valley, California-based company is using cloud technology and the Ethereum blockchain as the engine for its Paystand Bank Network that enables business-to-business payments with zero fees.
The company raised $50 million Series C funding led by NewView Capital, with participation from SoftBank’s SB Opportunity Fund and King River Capital. This brings the company’s total funding to $85 million, Paystand co-founder and CEO Jeremy Almond told TechCrunch.
During the 2008 economic downturn, Almond’s family lost their home. He decided to go back to graduate school and did his thesis on how commercial banking could be better and how digital transformation would be the answer. Gleaning his company vision from the enterprise side, Almond said what Venmo does for consumers, Paystand does for commercial transactions between mid-market and enterprise customers.
“Revenue is the lifeblood of a business, and money has become software, yet everything is in the cloud except for revenue,” he added.
He estimates that almost half of enterprise payments still involve a paper check, while fintech bets heavily on cards that come with 2% to 3% transaction fees, which Almond said is untenable when a business is routinely sending $100,000 invoices. Paystand is charging a flat monthly rate rather than a fee per transaction.
Paystand’s platform. Image Credits: Paystand
On the consumer side, companies like Square and Stripe were among the first wave of companies predominantly focused on accounts payable and then building business process software on top of an existing infrastructure.
Paystand’s view of the world is that the accounts receivables side is harder and why there aren’t many competitors. This is why Paystand is surfing the next wave of fintech, driven by blockchain and decentralized finance, to transform the $125 trillion B2B payment industry by offering an autonomous, cashless and feeless payment network that will be an alternative to cards, Almond said.
Customers using Paystand over a three-year period are able to yield average benefits like 50% savings on the cost of receivables and $850,000 savings on transaction fees. The company is seeing a 200% increase in monthly network payment value and customers grew two-fold in the past year.
The company said it will use the new funding to continue to grow the business by investing in open infrastructure. Specifically, Almond would like to reboot digital finance, starting with B2B payments, and reimagine the entire CFO stack.
“I’ve wanted something like this to exist for 20 years,” Almond said. “Sometimes it is the unsexy areas that can have the biggest impacts.”
As part of the investment, Jazmin Medina, principal at NewView Capital, will join Paystand’s board. She told TechCrunch that while the venture firm is a generalist, it is rooted in fintech and fintech infrastructure.
She also agrees with Almond that the B2B payments space is lagging in terms of innovation and has “strong conviction” in what Almond is doing to help mid-market companies proactively manage their cash needs.
“There is a wide blue ocean of the payment industry, and all of these companies have to be entirely digital to stay competitive,” Medina added. “There is a glaring hole if your revenue is holding you back because you are not digital. That is why the time is now.”
Powered by WPeMatico
WhenThen’s no-code payments platform attracts $6M from European VCs Stride and Cavalry
The payments space — amazingly — remains up for grabs for startups. Yes, dear reader, despite the success of Stripe, there seems to be a new payments startup virtually every other day. It’s a mess out there! The accelerated growth of e-commerce due to the pandemic means payments are now a booming space. And here comes another one, with a twist.
WhenThen has built a no-code payment operations platform that, they claim, streamlines the payment processes “of merchants of any kind”. It says its platform can autonomously orchestrate, monitor, improve and manage all customer payments and payments ops.
The startup’s opportunity has arisen because service providers across different verticals increasingly want to get into open banking and provide their own payment solutions and financial services.
Founded six months ago, WhenThen has now raised $6 million, backed by European VCs Stride and Cavalry.
The founders, Kirk Donohoe, Eamon Doyle and Dave Brown, are three former Mastercard Payment veterans.
Based out of Dublin, CEO Donohoe told me: “We see traditional businesses embracing e-comm, and e-comm merchants now operating multiple business models such as trade supply, marketplace, subscription, and more. There is no platform that makes it easy for such businesses to create and operate multiple payment flows to support multiple business models in one place — that’s where we step in.”
He added: “WhenThen is helping e-commerce digital platforms build advanced payment flows and payment automation, in minutes as opposed to months. When you start to integrate different payment methods, different payment gateways, how you want the payment to move from collection through to payout gets very, very complex. I’ve been doing this for over a decade now, as an entrepreneur building different businesses that had to accept, collect and pay payments.”
He said his founding team “had to build very complex payment flows for large merchants, airlines, hotels, issuers, and we just found it was ridiculous that you have to continue to do the same thing over and over again. So we decided to come up with WhenThen as a better way to be able to help you build those flows in minutes.”
Claude Ritter, managing partner at Cavalry, said: “Basic payment orchestration platforms have been around for some time, focusing mostly on maximizing payment acceptance by optimizing routing. WhenThen provides the first end-to-end payment flow platform to equip businesses with the opportunity to control every stage of the payment flow from payment intent to payout.”
WhenThen supports a wide range of popular payment providers such as Stripe, Braintree, Adyen, Authorize.net, Checkout.com, etc., and a variety of alternative and locally preferred payment methods such as Klarna Affirm, PayPal and BitPay.
“For brave merchants considering global reach and operating multiple business models concurrently, I believe choosing the right payment ops platform will become as important as choosing the right e-commerce platform. Building your entire e-comm experience tightly coupled to a single payment processor is a hard correction to make down the line — you need a payment flow platform like WhenThen”, added Fred Destin, founder of Stride.VC.
Powered by WPeMatico
Payments giant Stripe launches Stripe Tax to integrate sales tax calculations for 30+ countries
On the heels of acquiring sales tax specialist TaxJar in April, today Stripe is making another big move in the area of tax. The $95 billion payments behemoth is launching a new product called Stripe Tax, which will provide automatic, updated sales tax calculations (covering sales tax, VAT and GST) and related accounting services to Stripe payments customers initially in some 30 countries and across the U.S.
Stripe Tax is a separate service from TaxJar, but the two are not unconnected. As Stripe Tax was being built out of Stripe’s offices in Dublin over the last several months, Stripe’s business lead for EMEA Matt Henderson told me that the team had identified TaxJar as a strong company in the field. That ultimately led to M&A between them.
Sales tax — and specifically a more seamless way to deal with charging and tracking sales tax — is a painful issue for people doing business online.
Digital and physical goods are taxed in over 130 countries, Stripe said, and within that there can be a huge amount of variation and compliance complexity, since codes get updated all the time, too. Mishandled sales tax, meanwhile, can result in pretty hefty fines, sometimes up to 30% interest on past-due amounts.
Unsurprisingly, a sales tax tool has been the most-requested feature from Stripe’s customers, Henderson said, a call that presumably only got louder in the last year, as e-commerce and digital transactions went through the roof with COVID-19.
Arguably, that makes Stripe Tax one of the company’s more significant product launches, not to mention the first since announcing its monster funding round earlier this year.
Previously, Stripe customers would have resorted to using a third-party service (like TaxJar) to work out sales tax. Or, more typically, those Stripe customers would have opted to limit the number of places they sold goods and services, in order to minimize the pain of dealing with multiple, complex and usually quite localized tax codes.
“No one leaps out of bed in the morning excited to deal with taxes,” said John Collison, co-founder and president of Stripe in a statement. “For most businesses, managing tax compliance is a painful distraction. We simplify everything about calculating and collecting sales taxes, VAT, and GST, so our users can focus on building their businesses.”
Stripe said that a survey of its customers found that two-thirds of respondents said the challenge of implementing sales tax actually limited their growth.
TaxJar has built a strong system for handling that, but the company — based out of Massachusetts but with a remote team — is primarily focused on the U.S. market, which has sales tax that is complicated enough (there are 11,000 different tax jurisdictions in the country).
That leaves a lot on the table for building out sales tax tools for the rest of the world: The wider focus of Stripe Tax thus fills a particular geographical gap for the company, regardless of how well TaxJar and Stripe integrate over time.
There is another key difference worth noting between the two.
TaxJar came to Stripe’s attention with an established operation — 23,000 customers at the time of the announcement. Stripe (wisely) bolted that on as a standalone business, which means that new and existing customers that use TaxJar can continue to use it as is. That is to say, at least for now, they do not need to be Stripe payments customers in order to use TaxJar, even if the integration between the two platforms will only improve over time.
Stripe Tax, on the other hand, is being built from the ground up as a product aimed specifically at increasing touchpoints and stickiness with Stripe customers.
Stripe Tax provides real-time tax calculation based on customer location and product sold; transparent itemizing for customers; tax ID management in areas (like Europe) where business customers can provide their code and get a reverse charge on tax if they are under a certain turnover threshold themselves; and reconciliation and reporting across all transactions to make filing and remittance easier.
But there is for now no way to use Stripe Tax outside of Stripe payments.
This could pose some problems for some customers. These days, many of the strongest retailers will take an “omnichannel” approach that might cover selling through marketplaces, selling through websites, selling through social media and more — and not all of those experiences may be powered by Stripe. It will be worth watching whether future iterations of Stripe Tax can account for that.
Stripe’s most significant product launch prior to Stripe Tax — Stripe Treasury last December — underscores how the company is currently very focused on diversifying outside of its basic payments business and opening the platform to much wider, more scaled transactions.
Treasury, which is still in invite-only mode, saw Stripe partner with established banks to provide a business banking service, providing a way for its customers to handle money that they generate from their Stripe-powered businesses.
The full country list where Stripe Tax is launching is Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, New Zealand, the Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, the United States and the United Kingdom.
Updated to correct the number of customers TaxJar has to 23,000.
Powered by WPeMatico
Will fintech unicorn Flywire’s proposed IPO reach escape velocity?
It’s a big morning for fintech startups today: Flywire, a Boston-based magnet for venture capital, has filed to go public.
Flywire is a global payments company that attracted more than $300 million as a startup, according to Crunchbase, most recently raising a $60 million Series F last month. We don’t have its most recent valuation, but PitchBook data indicates that the company’s February 2020, $120 million round valued Flywire at $1 billion on a post-money basis.
So what we’re looking at here is a fintech unicorn IPO. A great way to kick off the week, to be honest, though I’d thought that Robinhood would be the next such debut.
Fintech venture capital activity has been hot lately, which makes the Flywire IPO interesting. Its success or failure could dictate the pace of fintech exits and fintech startup valuations in general, so we have to care about it.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
Regardless, we’re doing our regular work this morning. First, what does Flywire do and with whom does it compete? Then, a closer look at its financial results as we hope to get our hands around its revenue quality, aggregate economics and growth prospects.
After that, we’ll discuss valuations and which venture capital groups are set to do well in its flotation. The company had a number of backers, but Spark Capital, Temasek, F-Prime Capital and Bain Capital Ventures made the major shareholder list, along with Goldman Sachs. So, a number of firms and funds are hoping for a big Flywire exit. Let’s dig in.
What is Flywire?
Flywire is a global payments company. Or, as it states in its S-1 filing, it’s “a leading global payments enablement and software company.” And it thinks that its market, and by extension itself, has lots of room to grow. While “substantial strides [have been] made in payments technology in the retail and e-commerce industries,” the company wrote, “massive sectors of our global economy—including education, healthcare, travel, and business-to-business, or B2B, payments—are still in the early stages of digital transformation.”
That’s the same logic behind Stripe’s epic valuation and the rising value of payments-focused companies like Finix.
Powered by WPeMatico
4 ways martech will shift in 2021
The tidal wave of growth is upon us — an unprecedented economic boom that will manifest later this year, bringing significant investments, acquisitions and customer growth. But most tech companies and startups are not adequately prepared to capitalize on the opportunity that lies ahead.
Here’s how marketing in tech will shift — and what you need to know to reach more customers and accelerate growth in 2021.
First and foremost, differentiation is going to be imperative. It’s already hard enough to stand out and get noticed, and it’s about to get much more difficult as new companies emerge and investments and budgets balloon in the latter half of the year. Virtually all major companies are increasing budgets to pre-pandemic levels, but will delay those investments until the second half of the year. This will result in an increased intensity of competition that will drown out any undifferentiated players.
The second half of 2021 will bring incredible growth, the likes of which we haven’t seen in a long time.
Additionally, tech companies need to be mindful not to ignore the most important part of the ecosystem: people. Technology will only take you so far, and it’s not going to be enough to survive the competition. Marketing is about people, including your customers, team, partners, investors and the broader community.
Understanding who your people are and how you can use their help to build a strong foundation and drive exponential growth is essential.
Tactically, the most successful tech companies will embrace video and experimentation in their marketing — two components that will catapult them ahead of the competition.
Ignoring these predictions, backed by empirical evidence, will be detrimental and devastating. Fasten your seatbelts: 2021 is going to be a turbocharged year of growth opportunities for marketing in tech.
Differentiation is crucial
The explosion of tech companies and startups seeking to be the next big thing isn’t over yet. However, many of them are indistinguishable from each other and lack a compelling value proposition. Just one look at the websites of new and existing tech companies will reveal a proliferation of buzzwords and conceptual illustrations, leaving them all looking and sounding alike.
The tech companies that succeed are those that embrace one of the fundamentals of effective marketing — positioning.
In the ’80s, Al Ries and Jack Trout published “Positioning: The Battle For Your Mind” and coined the term, which documented the best-known approach to standing out in a noisy marketplace. As the market heats up, companies will realize the need to sharpen their positioning and dial in their focus to break through the noise.
To get attention and build traction, companies need to establish a position they can own. The mashup method — “Netflix but for coding lessons” — is not real positioning; it’s simply a lazy gimmick.
It is imperative to identify who your ideal customer is and not just who could use your product. Focusing on a segment of the market rather than the whole is, perhaps counterintuitively, the most effective approach to capturing the larger market.
Powered by WPeMatico
Clubhouse launches payments so creators can make money
Clubhouse, a one-year-old social audio app reportedly valued at $1 billion, will now allow users to send money to their favorite creators — or speakers — on the platform. In a blog post, the startup announced the new monetization feature, Clubhouse Payments, as the “the first of many features that allow creators to get paid directly on Clubhouse.”
Clubhouse declined to comment. Paul Davison, the co-founder of Clubhouse, mentioned in the company’s latest town hall that the startup wants to focus on direct monetization on creators, instead of advertisements.
Here’s how it will work: A user can send a payment in Clubhouse by going to the profile of the creator to whom they want to give money. If the creator has the feature enabled, the user will be able to tap “Send Money” and enter an amount. It’s like a virtual tip jar, or a Clubhouse-branded version of Venmo (although the payments feature doesn’t currently let the user send a personalized message along with the money).
.@joinClubhouse
@stripe pic.twitter.com/u7kXXdPXU7
— edwin (@edwinwee) April 5, 2021
“100% of the payment will go to the creator. The person sending the money will also be charged a small card processing fee, which will go directly to our payment processing partner, Stripe,” the post reads. “Clubhouse will take nothing.”
Stripe CEO Patrick Collison tweeted shortly after the blog post went up that “It’s cool to see a new social platform focus first on participant income rather than internalized monetization / advertising.”
When the startup raised a Series B led by Andreessen Horowitz in January, part of the reported $100 million funding was said to go to a creator grant program. The program would be used to “support emerging Clubhouse creators,” according to a blog post. It’s unclear how they define emerging, but cultivating influencers (and rewarding them with money) is one way the startup is promoting high-quality content on its platform.
The synergies here are obvious. A Clubhouse creator can now get tips for a great show, or raise money for a great cause, while also being rewarded by the platform itself for being a recurring host.
The fact that Clubhouse’s first attempt at monetization includes no percentage cut of its own is certainly noteworthy. Monetization, or Clubhouse’s lack thereof, has been a topic of discussion about the buzzy startup since it took off in the early pandemic months. While it currently relies on venture capital to keep the wheels churning, it will need to make money eventually in order to be a self-sustaining business.
Creator monetization, with a cut for the platform, has led to the growth of large businesses. Cameo, a startup that sends personalized messages from creators and celebrities, takes about a 25% cut of each video sold on its platform. The startup reached unicorn status last week with a $100 million raise. OnlyFans, another platform that helps creators directly raise money from fans in exchange for paywalled contact, is projecting $1 billion in revenue for 2021.
Clubhouse’s payments feature will first be tested by a “small test group” starting today, but it is unclear who is in this group. Eventually, the payments feature will be rolled out to other users in waves.
Powered by WPeMatico
Jeff Bezos’ investment fund is backing a startup hoping to be the AWS for SMB accounting
One of the biggest pain points for startups and small businesses is keeping up with back office tasks such as bookkeeping and managing taxes.
QuickBooks, it seems, just doesn’t always cut it.
Three-time co-founders Waseem Daher, Jeff Arnold, and Jessica McKellar formed Pilot with the mission of affordably providing back office services to startups and SMBs. With over 1,000 customers, it has gained serious traction over the years. And Pilot has now also received validation from some big-name investors. On Friday, the company announced a $100 million Series C that doubles the company’s valuation to $1.2 billion.
Bezos Expeditions — Amazon founder Jeff Bezos’ personal investment fund — and Whale Rock Capital (a $10 billion hedge fund) co-led the round, which also included participation from Sequoia Capital, Index Ventures, Authentic Ventures and others.
Stripe and Index Ventures co-led Pilot’s $40 million Series B in April 2019. The latest financing brings the company’s total funding raised to over $158 million since its 2017 inception.
The founding team certainly has an impressive track record, having founded and sold two previous companies: Ksplice (to Oracle) and Zupli (to Dropbox).
Pilot’s pitch is about more than just software. The company combines its software with accountants to do things such as provide “CFO Services” to SMBs without a full-stack finance team. It also provides monthly variance analysis for all its bookkeeping customers, essentially serving as a controller for those companies, so they can make better budgeting and spending decisions.
It also helps companies access small business tax credits they may not have otherwise known about.
Last year, Pilot completed more than $3 billion in bookkeeping transactions for its customers, which range from pre-revenue startups to larger companies with more than $30M of revenue a year. Customers include Bolt, r2c and Pathrise, among others.
Pilot has also inked a number of co-marketing partnerships with companies such as American Express, Bill.com, Brex, Carta, Gusto, Rippling, Stripe, SVB, and Techstars.
Ironically, Pilot says it aspires to the “AWS of SMB backoffice.” (In fact, co-founder Waseem Daher started his career as an intern at Amazon). Put simply, Pilot wants to take care of all those back office tasks so companies can focus more on growth and winning business.
Pilot strives to offer an “exceptional customer experience,” which is reflected in the fact that over 80% of the company’s business is driven by customer referrals and organic interest, according to Daher.
Whale Rock Partner Kristov Paulus said that white-glove customer service experience and Pilot’s “carefully-engineered” software make a powerful combination.
“We look forward to supporting Pilot in their vision to make back office services as easy-to-use, scalable, and ubiquitous as AWS has with the cloud,” he said.
Pilot’s model reminds me a lot of that of ScaleFactor’s, an Austin-based startup that raised $100 million in a year before it crashed and burned. But the difference in this case is that Pilot seems to have satisfied customers.
Powered by WPeMatico