PromisePay, an Australia-headquartered fintech startup that specializes in payments for online marketplaces, has raised $10 million in fresh capital for growth.
We wrote about the company when it landed $2 million nearly a year ago, and this latest round is comprised of a number of strategic investors. Australia’s Carsales led the financing, with participation from Australian VC funds Rampersand and Reinventure, and existing backers U.S.-based Cultivation Capital and Mark Harbottle, co-founder of logo marketplace 99Designs (another notable Australian tech name.)
Founded in 2014, PromisePay targets new digital commerce platforms, such as online marketplaces, where the risk of fraud or disagreement is higher than more traditional online commerce. The startup, which graduated St. Louis’ SixThirty fintech accelerator, claims over 40 customers in Australia and the U.S., including 99Designs-owned web and app marketplace Flippa, home renovation service Hipages and Taskrabbit-like Airtasker.
PromisePay co-founder and CEO Simon Lee explained to TechCrunch in an interview that, beyond facilitating payment, the startup manages fraud on both the seller and buyer’s side, provides support for buyers, and resolves disputes so e-commerce sites “don’t have to worry about payments and can just focus on their business.”
In the case of fraud, he explained that PromisePay takes on the financial risk for each transaction, which makes its credibility checks on both sides hugely important. When there is a first-time buyer or seller, PromisePay runs a real-time check using a mixture of signals such as social media, device diagnostics, email and more to establish credibility. (Similar to Southeast Asia’s FinAccel which we recently wrote about.)
“There are thousands of platforms looking to create fast, simple and trusted payments between buyers and sellers that don’t know each other. It’s a great deal more complex than just a payment, it’s an entire experience, and our technology delivers that experience seamlessly for platforms all over the world, and with full protection to all parties,” Lee said in a statement.
“Theres a fundamental shift in payments, everything is moving online, Uber is a good example of that. These types of platforms are a little more complicated than just taking a credit card for payment,” co-founder and Chief Experience Officer Darren McMurtrie added.
PromisePay claimed its revenue grew 25 percent per month over the past year, although it didn’t provide a raw figure for sales. It has been on a hiring spree with its staff, which is spread across Australia, the U.S. and Philippines, jumping from 35 to 75. Lee said that figure is likely to reach 140 next year.
“The great thing about Australian startups is that we bootstrap,” Lee explained. “U.S. companies can burn through $40 million in two years but we can make $10 million last four years.”
Beyond general growth, Lee and McMurtrie — CTO Simon Jones is the third founding member — said the company is weighing up whether to expand its focus into new verticals, or go after business in new geographies outside of Australia and the U.S..
For now, landing Carsales, Australia’s largest online car site, which is listed on the ASX, and other strategic investors is proof for the founders that they are on the right track.
“They went out to the market and settled on our platform,” Lee said. “They see the digital landscape is changing and that payments will be an important part of the story.”
“We searched extensively for a provider that could bring trusted payments to our marketplaces, and PromisePay was uniquely able to do so. We immediately saw value not just for our own business but for countless other platforms. So not only will we be using PromisePay but we’re also delighted to be an investor in PromisePay,” Carsales founder and CEO Greg Roebuck added in a statement.