By Joshua Silver, founder and CEO
I’m thrilled to announce that we have closed a $20M Series A led by Matrix Partners, with participation from existing investors including Accel, Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, Ardent Venture Partners, and a number of strategic angels.
In this post, I’ll share some thoughts on the raise and the path ahead.
No funding for fintech? Not quite.
The VC headlines for the last 12 months paint a bleak picture for any company that isn’t in AI.
Explosive growth of AI combined with regulatory scrutiny around fintech creates the impression that fintechs aren’t getting funded. Through discussions with investors, I found the reality is more nuanced. In our case, investors were attracted to our:
- Core technology
- Deep expertise as payments founders, SaaS leaders, and consultants
- Unwavering commitment to quality and customer service
- Growth since our last raise
In the words of Matt Brown, Partner at Matrix:
Payments are still surprisingly siloed, inaccessible, and user-unfriendly. However, trillions in payment volume are shifting from old-school solutions to modern software platforms with embedded financial services. Rainforest is a dramatically better experience for buyers, sellers, and the platforms that connect them. I’ve founded and invested in companies with this software plus embedded financial services model over the last decade. I’ve seen dozens of approaches to payments, but none come close to Rainforest. They’ve built their core tech, not just a wrapper around others. They’re experts not just in payments, but in SaaS, platform growth, risk, and the many other areas you need to pull this off. Their impressive traction speaks for itself. I’m thrilled to support them as they continue modernizing embedded payments.
Our growth to date
Rainforest was built from the ground up to be the PayFac-as-a-Service provider that could compete against the giant modern processors and scaled merchant acquirers. And win.
As TechCrunch pointed out last year, Rainforest is “capturing volume as software platforms migrate from legacy processors such as Fiserv and FIS. As that happens, it competes against companies like Stripe to embed financial services and payments.” That continues to be the case.
We’re also winning against smaller upstarts because of our responsiveness, transparency, and deep industry expertise.
Since our last round, we’ve grown in three big ways – all in service of helping software platforms drive revenue and improve retention while seamlessly accepting and sending payments.
1. Product
We’ve continued to invest in our core product to reduce fraud and help platforms increase payments adoption.
- Implemented 3DS to protect merchants and reduce fraud
- Added support for Apple Pay to reduce checkout friction and help platforms grow payment volume
- Launched a suite of enhancements to our merchant onboarding component, including Plaid bank verification and merchant self-service options
2. Customer Growth
The number of SaaS platforms live on Rainforest has grown by 5x and total processing volume by more than 17x.
- We’ve continued to grow in the healthcare, trucking, and specialty retail industries while adding platforms in professional services, field services, and donation management.
- We signed multiple platforms with billions in annual processing volume.
- We’ve won platforms away from low-cost competitors.
Our growth continues to be driven primarily by word of mouth. SaaS leaders refer their peers. Even founders who chose alternative providers and regret their choice are now referring Rainforest. VC and PE firms – including firms who are not invested in Rainforest – refer their portfolio companies. Industry experts say “talk to Rainforest”.
3. Team
We’ve expanded our engineering, payment operations, platform success, and go-to-market teams.
The path ahead
This fundraise puts Rainforest in a position to invest in the areas that most materially impact our platform partners’ success: product and support.
We will accelerate investment in our core product, including features and enhancements requested by our platform partners. Our roadmap includes:
- Additional payment methods
- Programmable funds flows
- Increased self-serve functionality in our embeddable components
- Expanded terminal options
- Automated interchange optimization
We’re also expanding our Platform Success and behind-the-scenes Payment Operations teams to ensure that our signature white-glove support remains a constant amidst growth. I’m frequently asked if high-touch support is scalable, and the answer is absolutely yes.
What won’t we be doing? We won’t be adding a bunch of ancillary financial products that distract from our core product. Rather, we will stay true to being the very best embedded payments company, and support an open ecosystem for partner products and integrations.
Gratitude
First and foremost, thank you to the incredible Rainforest team. You are exceptional. We receive unsolicited compliments like this every day.
That customer-obsessed mindset can’t be taught; our team genuinely cares about every single platform and merchant. I’m grateful for that. This is how we win.
Thank you to our channel partners. We’ve always championed the open ecosystem approach because it’s best for platforms. We believe in a best-of-breed approach, not a best-of-suite approach, so we’re excited to continue partnering with best-of-breed providers with adjacent solutions. Together, I know we are offering the best solution on the market, and I’m excited about everything we’ll accomplish together moving forward.
Thank you to our investors. I’m thrilled to be joining the Matrix family alongside iconic companies like Afterpay, Canva, Flex, Flock Safety, Hubspot, Quora, and Zendesk. I’m also grateful that all of our existing investors chose to re-invest with us.
Just as importantly, thank you to our platform partners. It’s clear that you value purpose-built technology and white-glove support. We appreciate that you’ve believed in us from the very beginning. My promise to you: we will aim to over deliver for you each and every day.