In the biggest funding round of the week for B2B FinTech, HR and payroll company Namely secured $50 million in venture capital funding. That, said Namely, is a reflection of how demands for payroll technology are changing across the mid-market.
“There have been tremendous developments in HR technology over the past few years,” said Namely CEO Matt Straz in an interview with PYMNTS. He added that, for the mid-market in particular, demand is high. “While HR technology vendors have ignored mid-sized companies in the past, businesses are now able to get what they need with the introduction of all-in-one platforms.”
Paper checks remain commonplace in business payments, especially in the payroll department. Some companies have decided to give into the demand. Last year, another payroll firm, Patriot Software, said it would provide blank payroll check stock to its corporate clients in response to requests for such a service that simply couldn’t be ignored.
Straz noted that Namely clients use a range of payroll tools, “so they rely on both paper checks, as well as direct deposits” and other rails.
With the new funding, Namely said it will aim to expand its presence in the mid-market, as well as enter into new industries. Incoming regulatory changes, including with the Affordable Care Act, are some of the largest HR-related concerns businesses have today, so Namely added it will also look to focus on aiding cash management and visibility efforts for its clients facing a financial burden from such regulations.
“Cash flow burdens often come down to the benefits paradox. Benefits are a great way for companies to attract and retain talent, but many companies can’t afford to spend more there,” the executive said. “Instead, they need to find other ways to achieve their goals.”
It’s a big week for Namely, and analysts say it will be a big year for the company, too. But it’s not the only B2B FinTech firm that secured new investments. We break down the rest of the deals finalized this week below.
As Namely told PYMNTS, the $50 million funding round is a reflection of the changing payroll needs across the mid-market. Namely announced the latest investment Thursday (Jan. 5), with Altimeter Capital and Scale Venture Partners leading the Series D round. According to reports, several other existing backers participated, including Sequoia Capital, Matrix Partners and True Ventures. Namely will be looking to not only grow existing operations but to introduce new services for clients and to expand those services into new industries. Analysts are expecting big things from the company; while sources say it’s not yet hit the $1 billion “unicorn” valuation, they also said this may be the final funding round for the company before it goes public. Reports also said Namely has some high-profile parties interested in a takeover, including Google, though the firm said it will look to remain an independent firm.
Salesforce Ventures has joined the team of backers behind CloudCraze, a B2B eCommerce solution built on Salesforce itself. Along with Insight Venture Partners, Salesforce provided $20 million in new venture capital to the company that will help CloudCraze focus on R&E and grow across the U.S. and EMEA. The funds will also be used to expand its team, CloudCraze said Thursday. The funding comes at a time when analysts expect continued growth for the B2B eCommerce space, which is estimated to see a $1.1 trillion valuation by 2020, reports said.
This Software-as-a-Service startup looks to provide businesses with digital learning solutions. Based in India, Learntron services companies across Asia and the Middle East, providing corporates — along with tutoring firms, online education portals and schools — training software on a subscription basis. The company is operated by Heuristix Digital Technologies, which revealed this week that Kae Capital provided an undisclosed investment in the company.
In an interesting twist, BitPagos, based in Argentina, has not only changed its name to Ripio, it’s also decided to abandon the B2B payments space. “BitPagos is a brand that was too linked to merchants and B2B payment processing,” the company told reporters after it announced $1.9 million in new Series A funding, led by Huiyin Blockchain Venture in China. The company said it plans to raise even more — up to $2.3 million — over the next 90 days. Good news for Ripio but bad news for B2B payments.
U.K. alternative lender Funding Circle is an outlier in this week’s B2B venture capital roundup: The company has just announced new investment nearing $50 million, though venture capitalists didn’t provide it — the U.K. government did. Reports Thursday said state-owned British Business Bank led the investment, with an agreement that the funds will be used to finance small businesses. According to BBB Chief Executive Catherine Lewis La Torre, the investment reflects the BBB’s understanding of the importance of alternative finance in the SME space, though it is looking to introduce stricter regulations for the industry to protect investors and borrowers alike.