By Joshua Silver, founder and CEO
After a successful exit from my first startup, Patientco, a patient financial engagement company, I spent several years running a consulting firm focused on helping software companies embed payments and other financial services to their products. Through dozens of engagements, a few consistent patterns emerged:
- The most successful software companies were creating huge new revenue streams via embedded payments – in some cases surpassing revenue on their core software!
- Customer retention metrics skyrocketed once a merchant signed up for payment processing, but attach rates (i.e., the percentage of customers who adopted payments) remained low in many cases.
- Software platforms were desperately looking to migrate off scaled incumbent processors in search of more modern technology. But, poor economics and DIY service models led many migration projects to falter.
- As the market matured, platforms wanted to build more unique payment flows but struggled with finding vendors who could handle the complexity.
Put simply, software platforms were all looking for the same basic thing:
A payments provider who provided robust, modern technology with a great developer experience (DX), exceptional customer service, and fair commercial terms with full portability of merchant data.
Disappointingly, despite looking at every possible option, I didn’t find any providers that checked all the boxes. On the one hand, the new upstart PayFac providers were mostly just wrapping other processors and had all of the problems of their predecessors, plus unproven tech. On the other hand, the large modern processors were all originally built for direct merchant processing; they had to retrofit their platform to even be able to support embedded payments via software platforms. Plus, none had enough knowledgeable and experienced talent to offer the level of service that I knew growing software companies were hungry for.
As an entrepreneur at heart, I knew I could do better. My vision was to set the new industry standard for both service levels and commercial terms, while providing incredible technology.
So in 2022, I assembled an all-star founding team to start Rainforest. I am so grateful that many of my former colleagues from Patientco decided to join me for another adventure. Others I had met while consulting came on board too; they were just as disappointed with the current offerings.
Our first few weeks together were magical. Drawing on our decades of experience in software, fintech, and payments consulting, we designed the platform we always wished existed. In less than nine months and after countless late nights and weekends, we flipped the switch and processed the first payment.
Since then, despite operating in semi-stealth mode, demand has been incredible. Many of our customers each process hundreds of millions of dollars, and with our highly scalable platform, we are able to support our clients as they grow.
Along the way, we quietly raised an $11.75 million seed round of funding 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.
I’m thrilled with how far we’ve come in such a short period of time. But we’re clear on the path ahead and all that’s yet to be accomplished. To that end, we’re heads down working with an amazing set of clients and tackling a robust pipeline. We’re also forming strong partnerships to round out our best of breed approach and making strategic hires to deepen our bench.
Drop us a line if you’re interested in learning more about our product. And for more about our fundraise, I’ve shared some details here.
