Yahoo Finance Google-backed GoCardless closer to $1bn valuation with latest funding
British financial technology start-up GoCardless has moved closer to a $1bn (£734m) valuation following a fresh investment round, raising another $95m, the company said on Thursday. That brings the total company funding to $970m, following a surge in demand for digital payments during the coronavirus pandemic.
The latest Series F funding round, led by Bain Capital Ventures, follows a 46% year-on-year growth for the company, bringing it close to “near-unicorn” status, it said.
“This funding round demonstrates the strength of the business and the confidence both our customers and investors have in GoCardless,” said Hiroki Takeuchi, chief executive officer and co-founder of GoCardless. “We’re incredibly proud to have seen continued business growth in such challenging times, and to have been able to continue supporting our customers — helping them stay in control of their payments and cash flow.”
The business will focus its future strategy on the emerging trend in finance known as open banking, which combines the latest technology with its global bank debit network, making it easier to complete transactions.
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“For the first time, merchants will be able to access the best of both worlds for recurring payments: Instant open banking payments will provide visibility and speed, while bank debit maximises cash flow and minimises churn by pulling funds automatically from payers — all at a lower cost than cards,” the company said in a statement.
It will also expand into e-commerce by developing an alternative to cards that will significantly lower transactions costs for merchants.
Founded in 2011, the London-based company has received major financial backing from the venture capital investment arms of Google-owned Alphabet (GOOG) and Salesforce (CRM).
GoCardless joins a number of European firms that have received major funding of late from American firms, including Sweden’s Tink, which boosted its valuation to €680m in an €85m investment round last week, and has also received funding from American online payment processing giant PayPal (PYPL).
“We’re excited by GoCardless’ enormous growth potential in a massive and largely untapped market,” said Matt Harris, partner at Bain Capital Ventures. “In particular, we’re seeing strong early results as GoCardless moves beyond [small and medium-sized businesses] SMBs to serve mid-market and enterprise customers and expands its international footprint to address a growing need for bank debit processing. We have enormous confidence in Hiroki and the entire GoCardless team to build a multi-billion dollar company that will redefine the payments industry.”
The open banking movement has gained traction in the UK and European Union following a new law known as the Payment Services Directive, or PSD2. It supports innovation and competition in retail payments and enhances the security of payment transactions and the protection of consumer data.
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