In this release, we are informed of an additional $50 million in funding for MineralTree, the Cambridge, MA-based payments automation fintech. The company apparently used some of this funding to acquire a couple of other fintech startups (although we don’t know if it directly tied to the funding), one in a competing role and another in an adjacent space.
The first is Inspyrus, a SaaS provider of payables automation, while the other is Regal Software (out of the Atlanta area), which specializes in disbursements and ERP integration. We expect that the acquisitions, in addition to gaining some scale with the additional clients, provide access to some valuable patented capabilities as well.
‘The investment round and acquisitions come at a time when MineralTree is seeing increasing demand for its solutions as businesses of all sizes are becoming focused on addressing both pandemic-related work-from-home mandates and rising costs associated with manually processing invoices and B2B payments. $27 Trillion in B2B payments are made in North America every year and businesses spend an estimated $510B on direct and indirect manual AP costs making those payments. By automating AP, businesses can save as much as 80% of these costs and allow their AP process to function seamlessly while working fully remote.’
So this is just another in the ongoing expansion of digital payments. As we know, the pandemic has increased corporate interest in modernizing financial processes, especially across North America, where paper remains an obstruction to safer and more efficient financial operations. Some of the funding had dried up so this deal might be a further indication that consolidation will be happening to gain profitability through scale. The mid-market continues to be a valuable target since larger firms have moved further down the road towards digitization.
‘ “Mid-market companies of all sizes continue to show strong interest in automating their AP and payments processes, but as a market segment have been overlooked and underserved,” said MineralTree Chief Executive Officer, Micah Remley. “Our vision to revolutionize B2B commerce starts with making the invoice to payment processes simple, speedy, and secure for mid-market customers and our Bank partners. This new funding, combined with expanded product capabilities and scale that come as a result of acquiring Inspyrus and Regal Software, uniquely positions MineralTree to do just that.” ‘
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
