Why I started Rainforest

By Joshua Silver, Rainforest 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.

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