Finix raises $30 million as fintech spotlight picks sides – TechCrunch
Finix announced today that it has raised $30 million in new venture capital, bringing its total known fundraising to $133 million. The round comes nearly two years after the do-it-yourself payments company closed a $30 million expansion to its $35 million Series B and about 18 months after it raised a $3 million SPV led by LatinX and Black – investors.
The cash tranche is significantly smaller than the extended Series B total, but Finix included new investors participating in the round, meaning this is not an extension round, “thanks to the growth” it has shown over the past six months.
New and existing backers The General Partnership (TheGP), Franklin Templeton, Acrew Capital, American Express Ventures, Bain Capital Ventures, Cap Table Coalition, Homebrew, Insight Partners, Inspired Capital, Lightspeed Venture Partners, Precursor Ventures, PSP Growth and Vamos Ventures participated in the company’s latest round.
Finix did not disclose its valuation, noting in the press release — while acknowledging “the current funding environment — that the capital was raised this summer and “resulted in an increased valuation.” TechCrunch reached out to Finix for further comment, but had not heard back as of at the time of writing.
The SaaS startup’s core business is helping software companies process their own payments through flexible software, though it has since expanded to be a direct payments facilitator. The company sits aside companies like Stripe, which it is not subtle about competing with.
A month after the startup raised its 2020 Series B led by Sequoia in 2020, the venture firm walked away from the deal, reportedly returning to Finix a $21 million check that represented the full value of the investment along with the board seat, information rights and stock. . TC’s Connie Loizos reported at the time that Sequoia decided to pull back because they decided Finix was in direct competition with Stripe, one of the portfolio darlings.
In May of this year, Finix doubled down on Stripe competition when it announced that it would directly facilitate payments through its internal platform, something it had historically been unable to do as just an API provider. The move to direct facilitation allowed it to capture smaller clients below the previous sweet spot of serving clients with ~$50M in transaction volume. It also moved into the personal payments space to allow different types of businesses to accept credit card payments. As is often the case in fintech: the broader, the better.
The two moves put Finix squarely on Stripe’s turf, though CEO and co-founder Richie Serna told TC’s Mary Ann Azevedo that Finix differs from Stripe in its focus on creating an open ecosystem. Serna compared his company to Android and Stripe to Apple, which has notoriously worked to keep the iOS platform closed.
“We built technology that would take a three-year in-house build by dozens of engineers, with tens of millions of dollars in technical R&D and investment, and brought it down to a number of months by getting developer-friendly APIs to start monetizing their payments, he told TechCrunch in an interview in May. “That was our biggest core offering. What we’ve done now is become a payments facilitator ourselves, so we can not only deliver the payments, but also all the back-office requirements and compliance certifications, so our customers can be up and running in a matter of days, rather than months.”
In a press release announcing its new cash, the company says Q2 2022 was its best quarter ever in terms of new deals. It’s welcome news in a quarter that saw mixed messages for fintech. So, clearly, Finix’s shift in strategy has made enough of a difference to get a cadre of investors pouring money into the venture-backed company.
