You never know when you might have the next Uber, Fab or Airbnb on your hands.
Even though those three startups grew up relying on Braintree to power their payments, the Accel-backed company wants make sure it has the next generation of breakout e-commerce companies on its platform.
So the company is waiving processing fees for the $50,000 in transactions for the next 1,000 startups that immediately sign-up with the company. That foregone transaction revenue (at Braintree’s standard rate of 2.9% and 30 cents a transaction) will probably add up to about few million dollars for the company. The company recently closed an additional $35 million in funding from Accel and NEA, so it has the capital to eat the upfront costs of doing this.
“We’ve helped thousands of companies get their start,” said Braintree CEO Bill Ready, who said he’s worked on four early-stage companies. “We reflected and thought — why don’t we do something to make it easier for startups to get to that first little bit of revenue.”
He added, “A significant portion of our very biggest clients — the LivingSocials, the Ubers, the Airbnbs — many of them processed their first dollar with us even though they’re doing hundreds of millions of dollars of volume now. They came to us when they were startups.”
He says the company is relying on the honor code to define what a startup is or isn’t. The application is here.
“If you’re still pre-revenue or if you only just started charging for your product, this is for you,” he said. “But if you already have revenue and an established business, it’s not.” He added that the company will even cover interchange costs from the credit card networks.
The company adds that there isn’t a catch and that it’s not asking for a longer-term commitment or contract. Braintree is competing with many other payments processing companies like eBay’s PayPal and YC’s Stripe for the loyalty of startups and small to medium businesses.
Braintree has raised $69 million to date in two rounds from Accel Partners, NEA, RRE Ventures and Greycroft Ventures. They didn’t raise funding until later in the company’s life — about four years after Braintree was founded. The company has said it’s processing $5 billion in transactions annually, with $1 billion on mobile devices.