We recently reviewed the fintech investment landscape in a report focusing on trends associated with the corporate banking space. In addition to pointing out the ongoing generally frenetic activity globally (including M&A, PE and VC funding), we also discussed how attention has turned to products and services targeted to businesses. In this referenced article appearing in Forbes we see yet another one of these investments, this one involving a mature Silicon Valley startup Bill.com. The company provides services to automate payables and receivables operations, with particular focus on the SME segments.
‘The investment in the Palo Alto, Calif.-based fintech was led by Franklin Templeton at a valuation of more than $1 billion. Mastercard, Fidelity Investments Canada ULC, Kayne Anderson Rudnick, Temasek, Cross Creek, and FLEETCOR also participated in the fundraising round…Bill.com serves the small and medium-sized marketplace with its Payment Management Platform which automates the payments process. The company has three million members, managing more than $60 billion a year.’
The announcement also points to a strategic partnership with Mastercard. Although we have no details at this point, we assume at the very least that this will involve the use of virtual cards in a more STP process, since Bill.com has clients on both the paying and receiving end of the cash cycle. Mastercard continues its product and investment focus into the B2B arena where lots of paper processes and payments will be replaced by digital solutions in the coming five years
‘The investment in Bill.com comes at a time when small businesses are in the spotlight. With traditional financial services companies looking for new avenues of growth they’re turning their attention to small businesses. At the same time, fintechs are going after those businesses, raising a lot of capital along the way. Take Brex, the provider of a credit card for startups, as one example. In January it raised $125 million in venture funding, propelling the company into unicorn status with a $1.1 billion valuation.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
