One of the things that got us thinking that B2B innovation was the “next big thing” in payments, is the amount of investment and energy being funneled into solving the problems with businesses paying each other. So, we thought it would be fun to track whose doing what and for how much, so here’s what’s been cooking for 2014.
Who doesn’t love the bragging rights associated with being an investor in a consumer facing technology that everyone recognizes and may even use? Well, for a very long time, investments on the consumer facing side of payments have dominated the activity spectrum, and last year alone $1.2 Billion was invested in that aspect of payments by venture firms and strategic investors.
As Paul Purcell, Partner at venture firm Continental Advisors LLC said in a recent PYMNTS.com Mobile Commerce Insider Series Webinar about why investments are often focused on the retail payments side, he said that many investors take the Peter Lynch approach to investing and “buy what you know. B2B payments, especially at that size are pretty gruesome propositions that the day-to-day person doesn’t really understand”.
That notwithstanding, he and his partners have been keeping track of the B2B space and watching companies like Bottomline Technologies for the past decade, and more recently, AribaPay which has broken out and partnered with Discover Card.
Purcell went on to explain that B2B is “so different, so much harder to understand, platforms are so big and the problems to solve are hard, that the consumer experience gets more attention”.
But all that’s starting to change.
According to CB Insights, the market is starting to shift focus just a bit. In Q1of 2014, early-stage investments spanned a wide variety of industries with internet & mobile deals making up the bulk of the transactions but not just in the consumer sector. Silicon Valley saw an increase in the investments in B2B/enterprise investments by venture capitalists.
Looks like VCs have seen increasing potential in the B2B space, and are starting to put money in the places that may not be as familiar to them as consumers, but quite familiar to the businesses that they invest in and deal with in 2014.
According to PYMNTS.com analysis T, a total of $253.77 Million was invested in B2B payments across a variety of segments – lending, procurement, billing and invoicing, data and business analytics to name but a few. Here’s a look at the investments to date and a brief description of what each does to bring innovation to the B2B space.
Venture Investments in B2B Payments Innovations YTD
Venture Investments in B2B Payments Innovations 2014 YTD
And here’s a look at how the year has unfolded with respect to who have invested in what and for how much:
January
January 6, 2014 – Union First Market Bankshares Corporation announced that it made an investment in The Payments Company (“TPC”), a privately held Richmond-based company that enables businesses to pay vendors electronically using its proprietary cloud based software and vendor network.
February
February 10, 2014 – Kantox, a Spain-based provider of an enterprise P2P trading platform for foreign currency exchange, raised €6.5 million in new VC funding. Partech Ventures and Idinvest Partners co-led the round, and were joined by return backer Cabiedes & Partners.
February 14, 2014 – Front Desk, a Seattle-based provider of business management and payment processing SaaS for personal services businesses and franchises, raised $4 million in Series A funding. Floodgate led the round, and was joined by Second Avenue Partners, Version One Ventures and Rich Barton.
February 25, 2014 – Tradeshift, a Copenhagen-based digital invoicing platform, raised $75 million in new VC funding led from Singapore’s Scentan Ventures. The deal will fuel Tradeshift’s expansion into Japan. Tradeshift, which offers software for business-to-business sales and collaboration, had raised $37 million in venture funding from Notion Capital, Ru-net, Kite Ventures, Intuit, and PayPal.
March
March 4, 2014 – Clinicient Inc., a Portland, Ore.-based provider of revenue cycle management software and clinical solutions for outpatient rehabilitation therapy businesses, raised $15 million in Series C funding from Catalyst Investors.
March 6, 2014 – Payoneer Inc., a New York-based online payments company, raised $25 million in Series D funding. Susquehanna Growth Equity led the round, and was joined by return backers Carmel Ventures, Greylock IL and Vintage Venture Partners.
March 24, 2014 – Demandbase announced the closing of $15 million in venture capital to grow its platform for personalized B2B marketing. Greenspring Associates, a global venture with nearly US $3 billion in committed capital, led the round. Existing investors including as Scale Venture Partners, SigmaWest, Altos Ventures, Costanoa Ventures and Adobe Systems, participated in the investment. The investment will help accelerate the growth of the company’s advertising solutions and fund additional innovations scheduled for release in 2014.
March 31, 2014 – Handshake, a New York City-based sales order management platform for wholesalers, raised $8m in Series A funding. The round was led by new investor Emergence Capital Partners, with participation from current investors SoftTech VC, MHS Capital, High Peaks Venture Partners. The company intends to use the funds to expand platform capabilities in eCommerce, moving it beyond a mobile application into an omni-channel commerce platform
April
April 8, 2014 – NetProspex, the leading provider of cloud-based B2B marketing data management services, received $13 million in Series C funding led by Spring Lake Equity Partners. NetProspex will utilize the funding for further product innovation and to expand sales and marketing to meet growing market demand. The money will be used for innovating products and boosting sales and marketing efforts, according to a release.
April 8, 2014 – Closely, the maker of Perch, a social analytics app for small businesses, raised $3 million in a series A round of funding led by Grotech ventures. The funding will be used to build out the company’s SMB marketplace platform, Perch and expand support for small businesses throughout North America.
April 9, 2014- Idea generation and management platform Wazoku secured £750,000 in a round led by existing investors Cambridge Angels and New Model Venture Capital, bringing its total funding to date to £1.25m.
April 10, 2014 – Fundbox raised $17.5 million in Series A funding led by Khosla Ventures. The company focuses on the B2B space where companies use invoices for goods and services.
April 14, 2014 – SilverRail Technologies raised a $40 million Series C venture round led by Mithril Capital Management, the growth equity firm run by Peter Thiel and Ajay Royan. Previous investors, including Canaan Partners, Sutter Hill Ventures, and Brook Venture, also participated in the round. This round will enable SilverRail Technologies to accelerate the addition of rail carriers into the SilverCore platform, as well investing in the development of cross-border and multi-carrier journey planning.
April 15, 2014 – The Currency Cloud, announced a new funding round of $10 million (£6 million) from Atlas Venture, Anthemis Group, Notion Capital, XAnge Private Equity, and Silicon Valley Bank. This software-as-a-service company provides international payments though electronic payment processes.
April 16, 2014 – Procurify, an international cloud procurement software closed a $1.2 million seed round of funding from: India- and Silicon Valley-based Nexus Venture Partners, Mark Cuban, and the Business Development Bank of Canada (BDC). This seed funding will enable the 22-person team up to continue developing new features, grow their team and increase their worldwide customer base.
April 22, 2014 – Kabbage, a small business lender, closed a $270 million credit facility with Guggenheim Securities, the investment banking and capital markets division of Guggenheim Partners.
April 24, 2014 – freee announced that it received $8 million in Series B funding from DCM and Infinity Venture Partners. freee has automating accounting/bookkeeping for SMBs, and will invest further in product development to add features covering more lines of back-office chores.
If we’ve missed any, please let us know, by contacting Jacqueline Murphy at jmurphy@pymnts.com
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