WePay, an online payments startup, is announcing $15 million in Series C financing, led by Phil Purcell of Continental Investors, who us the co-founder of the Discover Card and former CEO of Morgan Stanley. Others who participated include Max Levchin, Maynard Webb (WIN Investment Network) and Raymond Tonsing. This brings WePay’s total funding to $35 million.
The Y Combinator-backed startup originally formed to make it easier for groups to collect money and make payments together. The startup then pivoted slightly to become simple platform for businesses to collect and manage payments online. The startup added support for event registration and ticketing, custom invoicing, donations, mobile payments and e-commerce.
In 2012, WePay rolled out a white-label payments API and lowered its prices to court third-party developers and debuted an easy way to embed in-line payments. The startup has also been doing some compelling work in the development of Veda, an intelligent social risk engine that leverages social media data as well as traditional business data to catch merchant fraudsters.
As founder and CEO Bill Clerico tells us, now WePay’s entire business is its payments API, which focuses specifically around on infrastructure needed for payments for platform businesses. Specifically, WePay specializes in coordinating payments for marketplace or crowd funding platforms, basically enabling individuals to transact and process payments at scale between a lot of individuals. For example, Care.com uses WePay for payments. And marketplace for artisan goods CustomMade is also a customer.
Another area where WePay has aimed to differentiate from others in the space like PayPal, Stripe and Balanced, is in fraud and compliance risk.
The startup’s proprietary Veda social risk engine uses data as a way to underwrite merchants and make sure they are actually verified sellers. Sort of like a ‘WePay credit score,’ the engine uses data from social networks such as Facebook, Twitter and Yelp coupled with proprietary algorithms to mine and analyze a merchant’s social signals to gain a more accurate picture of risk. Veda also uses pattern recognition, integrated support data, and automatic cross-referencing to analyze risk. Veda needs five pieces of information (versus the 21 some payment companies require) to get started: first name, last name, name of business, email address, and phone number. Merchants can be approved within minutes.
Despite the slight pivot from group payments, the new bet seems to be paying off from a growth standpoint. Revenue from WePay’s payment API has grown over 600% in the last year, and the company has over 300 platform partners.
Clerico says that the new funds will be used for product development and international expansion.