Lightyear Capital, the New York-based private equity firm working in the fields of financial services, has established ProfitSolv to acquire integrated solutions for billing, payments and software services, a press release says.
ProfitSolv has been focused on acquiring firms in fields such as consulting, architecture and engineering.
Thus far, the release says, ProfitSolv has acquired three solutions: Rocket Matter, which works in cloud-based legal billing, practice management and payment processing, TimeSolv, which provides cloud-based software for legal billing and timekeeping, and ImagineTime, a practice management and payments company working with accounting firms and other such companies.
Lightyear intends to work toward acquiring software and payments companies, which the release calls “a highly fragmented market” that has a large number of smaller providers. According to the press release, the addressable market for payments solutions is around $1.4 billion for the legal vertical alone.
Mark F. Vassallo, managing partner of Lightyear, said the work with ProfitSolv “reflects our long-term investment thesis that embedding payment solutions in vertically integrated, sector-specific software will continue to gain market share from more traditional software providers.”
“We believe that solutions which integrate and automate billing, invoicing, and electronic payments will deliver stronger, more efficient receivables management, particularly since most small businesses still process paper checks,” he said, according to the release.
B2B FinTech investments have been going strong in 2020 thus far, with eCommerce-as-a-Service firm Mirakl securing a $300 million investment, payments firm Zoop securing a $10.85 million round and mobile-first financial service firm Finom getting $12 million in an investment round. Mirakl, the biggest win of the lot, plans to use its new funding for over 300 new hires and scaling its customer service and sales teams.
Financial services firms have also been working on diversifying, with American Express taking over Kabbage to expand small business lending and QuickBooks launching QuickBooks Cash to get into the banking space.
The idea between those moves, and numerous others like them, is to drive up competition, PYMNTS wrote, with partnerships helping companies get a leg up in spaces they weren't initially well-versed in.