There are a growing number of peer-to-peer marketplaces out there, helping to match up workers and sellers with products or skills, with buyers who wish to take advantage of them. But for those marketplaces to work, they don’t just need payment processing — they also need to worry about how sellers get paid. That’s Y Combinator-backed payments startup Balanced hopes to do, by providing a two-sided payment platform for marketplaces.
Balanced has a platform that works for both sides of a marketplace transaction. On the collections side, it provides card processing, escrow funds, fee collection, tax reporting, and fraud prevention. That allows marketplace companies to get up and running and accepting payments quickly. But it’s not the only player in that space, with companies like Stripe providing a lot of the same features.
What sets Balanced apart is the payments portion of the marketplace model. It offers a way for companies to quickly make payments to the sellers that provide goods and services through their platforms. That includes next business-day funds delivery through direct bank deposits to marketplace sellers. And since paying sellers is the most important part of getting them to stick around, marketplace companies need a way to get them paid as quickly as possible.
There are no real upfront costs for connecting to Balanced, and it only gets paid when a transaction passes over its platform. On the card processing side, Balanced takes 2.9 percent plus 30 cents per transaction. And it takes 25 cents per next-day deposit made to sellers. So it’s growing along with the businesses that use it.
That’s a model that’s proven attractive to marketplace startups, as Balanced has gotten more than 150 companies to test out its beta program. Its customer list is pretty impressive, with companies like TheFancy, Kitchit, CrowdTilt, Copious, and Zaarly using the platform.
Previously known as PoundPay, the company was founded by Matin Tamizi, Mahmoud Abdelkader, and Jareau Wade — who were all early employees at Milo.com, which had been acquired by eBay in 2010. It graduated from the Winter 2011 class of Y Combinator and has raised $1.4 million from SV Angel, Airbnb CEO Brian Chesky, celebrity investor Ashton Kutcher, and Reddit CEO Yishan Wong, among others.