As retailers, online travel agencies and other businesses that take payment online scramble to adapt to today’s increasingly mobile world, Durham payments software startup Spreedly is becoming known for its simple, secure and inexpensive solution.
October 27, 2015
European Investors Bet $2.5M on Spreedly’s Payments Software
Durham FinTech startup brings funding total to $4.7M, preps for landing larger deals.
So much so, that a cohort of existing and new European investors have put an additional $2.5 million into the company to grow its team from 12 to 35 employees over the next year and take advantage of increasingly larger opportunities with national and global companies. Spreedly has raised $4.7 million since 2013. Here’s a profile of the company ExitEvent published in July.
The startup offers something unique in the payments world—a software that allows merchants to accept any kind of payment on any device regardless of the processing technology or financial systems already in place. That means Spreedly customers don’t have to buy a whole new platform in order to securely and efficiently collect payment via mobile. So far, it’s been popular with startups and smaller merchants. But that’s starting to change after the credit card data and email addresses of tens of millions of people were stolen in high-profile Target, UPS, Sony and other data breaches.
Says CEO Justin Benson, who shared the funding news with me from the Money20/20 payments and FinTech conference in Las Vegas, “What we’ve discovered over the last six to nine months is larger opportunities than just startups. They love what we’ve built but we’re still just 12 people—they see immature business processes, sales and business development. We can keep growing organically but it makes sense to invest and build out so we don’t look so much like a startup.”
Spreedly’s newest investor has been successful in the payments space. Benson won’t share the person’s name but says he’s one of the founders of Ogone, a Brussels-based online payments service provider which was sold in 2013 for the equivalent of nearly $500 million to global payment provider Ingenico. He was a connection from existing investor E-Merge, which also reupped in the round. Spreedly won E-Merge as an investor in a successful 10-day campaign on AngelList in 2013. The Belgian investment group has interest and experience in online payments (having also invested in Ogone), making it an obvious choice to keep in the latest round.
Benson traveled to San Francisco and New York to meet with investors, but found this group most in line with his equity expectations and valuation. Plus, they’ll offer valuable advice and experience when Spreedly decides to expand to Europe or other countries.
Already about 40 percent of transactions using Spreedly come from outside the U.S. In many global markets, mobile transactions are more common than web ones. Benson hasn’t tackled those markets because of lack of resources and funding. That could change in the nearer future.
“We get excited about those opportunities,” he says. “If a client wanted to connect Spreedly to an African payment network, we would be indifferent. We’d have to make some changes to support that market, but we’d be able to offer them our software as a service.”
For now, he’s focused on staying ahead of competitors. So far, no one is directly competing with Spreedly. But some existing online payment providers are releasing documentation or APIs to allow their clients to process using other systems. Benson views that as validation for what his team is doing. But he does expect competition to come—payment startups are popular with venture capitalists these days.
He’s also building the team that will take Spreedly to larger opportunities and new markets. Jobs will range from software developers to sales and business development professionals to human resources and accounting folks. There will be larger support and account management teams too. He expects the team makeup to shift from 75 percent developers and DevOps to 60 percent. Eight positions are open now.
Benson is quick to give AngelList props for today’s news. When he moved from Boston to join four-year-old Spreedly in 2011, he helped it through a critical pivot to its current product. AngelList, and subsequently E-Merge, gave it the fuel to bring in more than 250 customers in two years and raise a round that promises even faster growth.
“AngelList was a lifesaver,” Benson says. “And we are a textbook case.”