Rainforest accelerates expansion with $29M Series B

By Joshua Silver, Rainforest Founder and CEO

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I’m thrilled to announce that we’ve closed a $29M Series B led by Matrix Partners and Infinity Ventures, with participation from Accel and Tech Square Ventures.

Since our $20M Series A last year, we’ve seen over 10x revenue growth fueled by billions of dollars in live processing volume. 

In this post, I’ll share some thoughts on the raise and the path ahead.

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Service is a key differentiator

Most payment providers view support as a cost center to be minimized. At Rainforest, we made a choice to do the opposite. 

We invest in service. 

Our 10x growth since Series A is evidence that we took the right approach. Service is one one of the top reasons vertical software platforms choose Rainforest.  

Zak Holdsworth, CEO of Hint Health said:

“Rainforest is so much more than a technology company, they’re an extension of our team. From high-level migration strategy to specific messaging, technical details, and day-to-day support, the Rainforest team works closely with us to make sure we get the desired outcome – a profitable, high-quality embedded payments product where we own our data and customer relationships – while making the transition as seamless as possible for our customers. Rainforest is a true partner.”

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Vertical software platforms are still underserved

We’re seeing a massive demand for purpose-built embedded payments. 

Big-name providers just aren’t meeting the needs of vertical software platforms because their technology and service model aren’t optimized for embedded payments.

These are just a few of the challenges we hear about from software platforms trying to make it work with general-purpose payment providers:

• Clunky, outdated merchant onboarding processes where the platform has no visibility into status or next steps
• Merchants unable to reconcile deposits against invoices because the numbers just don’t add up
• Payment providers “managing risk” but leaving the platform on the hook for five- or six-figure losses

On top of that, there’s no support from the payment provider. Platforms wait days for a templated response while merchants are left wondering when their hard-earned money will land in their bank account.

We built Rainforest to address these shortfalls and give vertical software platforms a payments product that actually drives volume and revenue – instead of headaches and support team burnout.

Our tremendous growth over the last year shows that there is still a huge need in the market. 

In the words of Matt Brown, Partner at Matrix and Rainforest Board member:

“Doubling down on our commitment to Rainforest was a no-brainer. They delivered even more growth than expected in the year following their Series A. Joshua Silver is a remarkable founder-leader who, along with his team, has been laser-focused on delivering superior service and modern embedded payments from day one. Embedded payments are the secret weapon of the best vertical software companies, like Shopify and Toast. It’s not uncommon to see 2-5x increases in revenue, retention, and other metrics once a platform successfully embeds payments. It’s easier than ever to add payments to a vertical SaaS product, but it’s harder than ever to succeed with payments because revenue depends on adoption. Rainforest provides the technology, service, and proven playbook to help their platform clients maximize adoption and drive real payments revenue.”

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Behind the scenes of 10x revenue growth

Since our last round, we’ve grown in three big ways – all focused on helping vertical software platforms grow payment volume, increase margin, and boost retention.

1. Product

We’ve expanded our core product to help platforms drive adoption, increase payment utilization, and provide a winning payment experience for both merchants and end customers.

• Embeddable chargeback management that guides merchants through the chargeback response
• Advanced ACH payments with real-time bank verification and balance-check to reduce failed payments and enable faster payouts to merchants on qualified platforms
• Real-time BIN lookup to support compliant surcharging 
• Partial authorizations to increase auth rates, especially in HSA/FSA payments
• Forward API enabling platforms to securely share data with trusted third parties – without requesting a token export

2. Client results

Our growth reflects our customers’ success – many of them rely on Rainforest to generate 50% or more of their revenue.

With our purpose-built technology, world-class service, and proven playbook, these are just a few of our clients’ achievements:

• Margin increased from 21 to 54 basis points
• 1600+ merchants migrated in just a few weeks
• 16% increase in card volume with UI optimizations
• HSA/FSA auth rate increased from <30% to 94%
• 90% reduction in chargebacks due to fraud

In the words of Jeremy Jonker, Co-Founder and Managing Partner at Infinity Ventures:

“One of the biggest challenges vertical SaaS companies face is the ability to migrate payment volume to a new provider and some companies struggle for years. This is exactly where Rainforest shines, helping their platform clients move hundreds of millions of dollars in just a few weeks or months. Rainforest has a repeatable playbook that they’ve demonstrated in healthcare, non-profit, and other verticals. We didn’t hesitate to lead the investment and support their next phase of growth because they’ve consistently demonstrated their ability to deliver a high quality solution and service at scale.”

3. Team

We doubled the size of our engineering team to accelerate innovation, and we more than doubled our platform experience team because customer service is one of our core values. We also welcomed additional leadership team members in GTM, People, and Legal.

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The path ahead

This fundraise puts Rainforest in a position to accelerate product innovation, scale service, and launch in Canada.

On the product side, we’ll focus on features that help our platform clients grow their payment volume and revenue in a scalable, sustainable way. This includes:

• Tap-to-phone
• Alternative payment methods
• Fintech orchestration
• Processing for Canadian merchants

Service is one of our core values, a key differentiator, and one of the top reasons vertical software platforms choose Rainforest. We’ve been able to scale it by investing in standardized processes, robust automation, and almost zero tolerance for product defects.

With this funding, we’ll continue to invest in optimization as well as growing our team of payments and vertical SaaS experts. 

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Gratitude

First and foremost, thank you to the incredible Rainforest team for generating such incredible results for our customers. We see success stories day after day because of your hard work.

Thank you to our investors. You’ve stood by us and made sure we have the resources we need to succeed.

Most importantly, thank you to all of our platform clients. You trust us every day with one of your most valuable revenue streams, and we will try to overdeliver for you every day.

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