B2B payments startup MineralTree, which offers accounts payable services for growing and mid-size businesses, has raked in $11.1 million in an investment round led by payments processor First Data, Forbes reported on Tuesday (Feb. 10).
The Boston-area company’s Series B round will also result in the addition of First Data EVP and head of financial services Andrew Gelb to MineralTree’s board of directors.
MineralTree, which currently has hundreds of customers and processed more than $1 billion in payments last year, works with cloud accounting systems NetSuite, Intacct and QuickBooks Online and with on-premise accounting software like Microsoft Dynamics and QuickBooks. It captures invoices as they arrive, routes them for approval through a company’s existing workflows and directly executes payments.
That can dramatically simplify and speed up accounts payable, MineralTree CEO B.C. Krishna told Forbes. “The solution we’ve built is a far more intuitive, affordable and secure option than other products in the market or the manual processes that too many companies are still using for accounts payable. We can deliver tremendous efficiencies to the antiquated status quo in AP, giving people an informed solution with great utility that is delightful to use and guaranteed secure.”
That status quo largely consists of the 11 billion checks that businesses use to pay invoices, along with manual processes that cost between $75 billion and $100 billion a year to handle invoices and cut and mail paper checks — and that’s after a drop in the use of checks for business payments from 80 percent in 2004 to 50 percent in 2013.
Along with being error-prone, that kind of process is also too slow to take advantage of suppliers’ discounts for early payment.
“The status quo in business payments is simply not acceptable,” Krishna said. “People use electronic payments for their personal bills and then go into an office that uses paper checks to respond to paper invoices and a paper-based workflow that is slow and prone to errors.”
Along with the new capital, Krisha told Forbes he hopes to leverage the First Data relationship to grow the company. “The First Data relationship, in addition to the capital, offers access to their tremendous footprint — six million merchants and 3,500 banks,” he said.