By Joshua Silver, founder and CEO
Today, after a lengthy private beta, we are publicly announcing our seed raise and making our platform generally available.
I couldn’t be more thrilled to announce that we have closed an $11.75 million seed funding round led by Accel, with participation from Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, Ardent Venture Partners and a number of strategic angels. The round includes a $3.25 million venture debt facility from Silicon Valley Bank (SVB), a division of First Citizens Bank.
Having led the way in the embedded payments space for more than 15 years, I’ve had a firsthand view of the ecosystem. In this post I’ll share some thoughts on the raise and the path ahead.
The backstory on the fundraise
In today’s fundraising market, investors are generally moving slower and more cautiously than in the past. However, that was not the case with Rainforest. Our oversubscribed round was highly competitive and we received offers from multiple leading venture capital firms.
In fact, many investors commented that they “have been waiting years to place a bet in the payments space, but passed on competitors because most were just ‘wrappers’ around other processors, lacked the right team, or didn’t have the vision needed to impact such a large market.”
When I first met Amit Kumar, partner at Accel, he told me he was focused on supporting his current portfolio companies and wasn’t even really looking for new deals at the time. Nonetheless, after conducting diligence calls – including with former heads of payments at large software platforms and several other fintech founders – he knew we were onto something and wanted in. Fast forward to today, I’ve now spent time with the entire Accel partnership, attended the Accel CEO Summit and benefited from Amit’s endless support, expertise, and enthusiasm. Put simply, Amit is one of our biggest cheerleaders. I’m honored to be part of the Accel family and learn from some of the world’s most iconic technology companies.
And I immediately hit it off with Jeremy Jonker, co-founder and managing partner at Infinity Ventures, who brings a rare strategic perspective to the payments market. As PayPal’s longtime former Head of Corporate Development, Jeremy spearheaded its acquisitions of payments companies including Braintree, Venmo, Hyperwallet and many more. Furthermore, as experienced deal sourcers, Jeremy and the entire Infinity team have also proved invaluable on our recruiting and go-to-market efforts.
I rounded out our cap table with the backing of a local Atlanta investor, Tech Square Ventures, and the deep software and fintech expertise of BoxGroup, The Fintech Fund, Ardent Venture Partners, and dozens of strategic angels.
Why we raised what we did
We raised a large seed round because we needed to think big and build a lot of infrastructure to overhaul such a large and established market. Payments may be a universal language, but money movement is highly complex.
We’re not in this to be yet another embedded payments provider. We’re here to be the best embedded payments company. One that sets a new standard for the entire industry. For starters:
- We bypassed traditional payment processors for sponsorship and instead receive sponsorship directly through banks. This allows us to control our destiny with regard to underwriting, credit policies, and risk management.
- We didn’t use any ‘middleware’ orchestration layers and built our own merchant ledger. I’ll provide more details in a future post, but this allows us to handle much more complex money flows.
- Beyond the operational and technical freedom, our fundraise gives us the flexibility to continue to offer industry leading commercial terms, including transparent interchange-plus pricing from your first processing dollar.
- It’s important to me that we earn our customers business each and every month, so we’ve done away with exclusivity, monthly minimums, and annual fees.
- Most critically, we offer full contractual merchant portability. With Rainforest, your clients remain yours – and so does your data!
My sincerest thanks and gratitude
First and foremost, thank you to the incredible Rainforest team. The passion runs deep in every single employee. You are changemakers operating at the highest level of your game. The unsolicited compliments we get every day are incredible. Just last week a prospect said to us, “the feedback from our team was that they were impressed with your technology, that you really know payments, and that you feel like a partner versus just a vendor.” That customer-obsessed mentality can’t be taught; it’s baked into the DNA of our employees, and for that, I’m forever grateful. This is how we win.
Thank you to our partners. We believe in a best-of-breed approach, not a best-of-suite approach like others, so we’ve created an open ecosystem for payments for other financial services. Together, I know we are offering the best solution on the market, and I’m excited about everything we’ll accomplish together moving forward.
Just as importantly, thank you to our clients. It’s clear that you value excellent technology and high touch service. We appreciate that you’ve believed in us from the very beginning. My promise to you: we will aim to over deliver for you each and every day.
