Fintech Moov raises $45 million from Visa, Andreessen Horowitz, Bain Capital Ventures and others
Visa, the payments giant, has made its first investment in Moov Financial, which provides a platform that allows companies to embed payments into their software.
Moov just raised $45 million in a Series B round led by Commerce Ventures that also included participation from Andreessen Horowitz, Bain Capital Ventures and Sorenson Ventures. Dan Rosen, founder and partner of Commerce Ventures, will join Angela Strange, a general partner at Andreessen, and Matt Harris, a BCV partner, on Moov’s board of directors.
Moov has raised $77.5 million in total, according to Wade Arnold, Moov’s co-founder and CEO. This includes a $5.5 million seed round in August 2020 and a $27 million Series A in December 2020.
Arnold has big plans for the fintech he founded in 2018. (He sold banking technology startup Banno to Jack Henry & Associates in 2014.) Moov offers an open-source platform that helps businesses add banking and payment functionality to apps. It currently employs 72 people and has 15 open engineering positions. Moov plans to add people. “As a startup in the current economic environment, it’s exciting to be a company with money to hire and take advantage of the layoffs that are happening,” Arnold said Fortune in an interview.
Two years ago, the competition for talent was much tougher, he said. A company in 2021 may have had 20 openings for engineers but only filled two or three. “It’s night and day between two years ago and today,” Arnold said.
The B round represents Visa’s first investment in Moov. The startup came to Visa’s attention after winning the firm’s Visa Everywhere Initiative in 2021. The competition features startups vying to create new opportunities for electronic payments, Arnold said. Moov placed first against a field that included several other fintechs such as Bitwage, Solo Funds, Alinea and Republic.
“They’ve been incredible partners from the beginning,” Arnold said.
Commerce Ventures, the VC that has funded Bill.com, Marqeta and MX, invested in all of Moov’s rounds. “Dan has been very helpful to Moov over the last two years. “Dollar for dollar, he’s the most useful investor over the last couple of years,” Arnold said.
Moov spent three months raising the B round, in an environment Arnold called “very difficult.” Inflation last year, the war in Ukraine and fears of recession caused the broad market to contract. This resulted in the valuations of public fintechs, such as PayPal, Block and Fidelity National Information Services, or FIS, falling by around 30% to 50%.
Because of the slowdown, venture capitalists have pulled back on the number of deals they’re doing this year, Arnold said. They also do more due diligence to find confidence in their investments, he said.
Venture capitalists often use “public companies”, or public comparables, for valuations of private companies. But when those companies plummet, it’s harder for VCs to predict a company’s trajectory, Arnold said.
“It’s a difficult time to raise money. “No one knows what the future holds … It’s easier for most VCs to do nothing,” he said.
But not all is bleak for fintechs. Online payment giant Stripe, an oft-mentioned IPO candidate, may finally go public. Co-founders Patrick and John Collison told employees in a Jan. 26 email that the company will either go public within a year or allow employees to sell shares privately, according to The Information. Stripe is expected to use a direct listing to tap into the public markets, the story said. The company raised $600 million in a Series H round in March 2021 that valued Stripe at around $95 billion.
Stripe would be the most valuable fintech ever to go public, Arnold said. “Their growth and valuation is unprecedented in the industry,” he said.
A Stripe listing, if it trades above $100 billion, is the signal that investors need to keep financing companies, Arnold said. “It would be a vote of confidence in new fintech companies. It [would] be a good example of a modern fintech leapfrogging the incumbents with both product and valuation,” he said.
When asked if Moov could ever go public, Arnold said, “We have big ambitions to build a market-changing company … It would be a privilege to do that for our employees and investors.”
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