PYMNTS B2B Investment Tracker

According to PYMNTS.com analysis, October saw somewhat of an investment declining trend for B2B payments, impacting almost every corner of the vast B2B payments universe. But the dollars are still flowing, though, showing a very vibrant B2B sector. During October, more than $75 million were invested in the B2B payments space. Almost a third of that came from the Transverse deal following the trend of investments of companies that work over the cloud. Several other investments in the e-billing space were completed. Logistics companies also raised several rounds, especially those that leverage the use of data.

North America

October 31 – NY-based Abacus, which helps employees with their expense reports, raised $3.5M in seed funding led by Bessemer Venture Partners and General Catalyst, with participation from Bloodstone, CrunchFund, FundersClub, Google Ventures, Homebrew, Sherpalo, Patrick and John Collison of Stripe, Josh Reeves of ZenPayroll, Jeff Epstein, former CFO of Oracle and DoubleClick, Naval Ravikant of AngelList, Andrew Kortina and Iqram Magdon-Ismail of Venmo, Adam Erlebacher of Simple, Sumon Sadhu of Quid, Nas and Paul Buchheit of Y Combinator. (Processing& Management)

November 4 – San Mateo-based Creditera, which provides comprehensive credit information to SMBs, raised $6.5 M in seed funding from Kleiner Perkins Caufield & Byers with participation of other investors that included Peak Ventures. Sources will be used for growth and recruiting. (Lending)

November 4 – Calabasas, CA-based LeadFerret, which provides a free database of 17+ business contacts, raised $250k from Redcrest. Funds will be deployed to accelerate growth. (Procurement)

November 4 – San Francisco-based Nitro, a cloud document editing firm, raised $15 M in funding from Battery Ventures.  (Analytics)

November 5 – Hollywood-based FloQast, which provides tools for accountants, received $1.3 M in funding from Toba Capital with participation from Amplify LA, Siemer Ventures, Danmar Capital and various LA Angel investors. At the same time the company is launching new products. (Invoicing&Accounting)

November 5 – Boston-based NewStar Financial Inc., a specialized commercial finance company, received $300 M debt and warrant funding from Franklin Square Capital Partners. Fund will be used to increase origination volume and facilitate asset growth. (Lending)

November 6 – Chicago-based Arro, which specializes in specializes in processing, contract manufacturing, logistics and warehouse services, secured a $2.25 M loan from CapX. The funds will be used for working capital needs. (Wholesale& Commerce)

Europe

November 5 – Limerick, Dublin and London-based Avvio, a provider of specialized software for hotels, raised GBP 3.5 M ($5.6 M) from Calculus Capital. Funds will be used for geographic expansion and marketing and R&D investments. (Analytics)

Asia

M&A

November 3 – Plano TX-based Expert Global Solutions sold certain segments of its accounts receivables arm to Platinum Equity. No financials were disclosed.*

November 5 – St. Louis, MO-based Transplace, a third party logistics provider, was acquired by Transplace. Financial weren’t disclosed.*

November 4 – San Francisco-based WorkingPoint, an accounting and billing platform for SMBs, was acquired by Zipmark

November 6 – Seattle-based Monchilla Inc., a provider of payroll tax solutions, including payments, was acquired by Xero Ltd.*

* Acquisitions are tracked but not included in the total investments

Here’s what happened in October:

The Big Takeaways for Payments and Commerce

• $3.5 Bn in financial activity was observed across a variety of investment types – VC funding, private placements, etc. Of that total, 82 percent was driven by strategic or venture –backed investments. The biggest transaction was the acquisition of Digital River for $840 M followed by the acquisition of ESB Bank by WesBanco Bank for $324.4M.
•  95 percent of the month’s activity was concentrated on the retail payments side. Of that, 77 percent was strategic or venture capital. On the commercial payments side the biggest move was the acquisition of A&S Services Group by Celadon Group.
•  Venture backed and strategic investments on the retail payments side accounted for $2.7 Bn in October.
•  Interestingly, most of the venture and strategic backed investments were in the payments and banking areas for 71 percent of the total. POS payment and acceptance ($21.4 M), P2P ($19.9 M), authentication/biometrics ($2.5 M)and prepaid ($ -)reflected the least amount of investment activity.
•  The most active VCs/PEs included Sirirs Capital ($840 M), Bain Capital ($164 M) and Insight Venture Partners ($60 M).
•  From a geographic perspective US was the most active region followed by Europe and Asia ex China.
•  The median investment amount was $3.5 Million.

The Retail and Commercial Payments Top 20

Here are the top 20 investments that drove 84 percent of the funding activity in October 2014. (Click the image to view full-size)