Routable Raises $30M Series B Led by Altman Brothers

The Rise of Routable: Securing $30 Million to Revolutionize B2B Payments

The COVID-19 pandemic has undeniably spurred the adoption of digital solutions across numerous sectors, with financial services experiencing particularly significant growth. Within this landscape, the realm of B2B payments is currently witnessing a surge in activity.

Boasting a substantial $120 trillion market, the increasing digitization of payments is attracting considerable investor attention. Routable, a fintech company focused on this very process, has recently secured $30 million in a Series B funding round, drawing participation from a distinguished group of angel investors.

An Unusual Funding Structure

This funding round deviates from the typical venture capital model. Sam Altman, CEO of OpenAI and former president of Y Combinator, and Jack Altman, CEO of Lattice, spearheaded the investment. Notably, the Altmans are brothers.

The investment group also included SoftBank-backed unicorn Flexport, alongside prominent angel investors such as Instacart co-founder Max Mullen, Airbnb co-founder Joe Gebbia, Box co-founder and CEO Aaron Levie, Salesforce founder and CEO Marc Benioff (also the founder of TIME Ventures), DoorDash’s Gokul Rajaram, early Stripe employee and angel investor Lachy Groom, and Behance founder Scott Belsky.

Rapid Growth and Expansion

This Series B raise follows Routable’s emergence from stealth mode just over eight months prior, with a $12 million Series A funding round.

Founded in 2017 by Omri Mor and Tom Harel, Routable was born from their experiences within marketplace environments. They identified a critical need for improved internal tools to effectively manage scaling business payments. Their journey included participation in a Y Combinator program and extensive interviews with CFOs and finance leaders.

The founders discovered that existing business payment tools were largely designed for larger corporations dealing with a relatively low volume of transactions.

“Through extensive customer research, we pinpointed a significant challenge in handling high-volume business payments, and that’s where we concentrated our efforts,” Mor explained to TechCrunch.

Automating the Payment Lifecycle

Routable’s core objective is to streamline bill payment and invoicing procedures – encompassing accounts payable and accounts receivable – enabling businesses to concentrate on expanding their primary product offerings without being burdened by payment complexities.

“A business payment is akin to navigating a legislative process, whereas a consumer payment is as simple as sending a message,” Mor stated. “We automate each stage, from purchase order to reconciliation, and through our API, companies avoid the need to develop their own integrations. We manage the process, facilitating faster money movement.”

Since securing its August 2020 funding, Routable has experienced a 380% increase in revenue, according to Mor. Furthermore, the company saw a threefold increase in new customers last month compared to the previous one. Their clientele includes companies like Snackpass, Ticketmaster, and Re-Max.

“We have consistently exceeded quarterly expectations for the past 18 months,” Mor shared with TechCrunch.

Expanding into the Enterprise Market

Initially focused on startups and small to medium-sized businesses (SMBs), Routable is now extending its reach into the enterprise sector based on market demand and customer feedback.

The company currently integrates with popular accounting software such as QuickBooks, NetSuite, and Xero, and plans to expand compatibility to include Oracle, Microsoft Dynamics, Workday, and SAP.

“Our future investments will focus on delivering the same level of automation and user-friendliness to enterprise clients that we currently provide to SMB and mid-market customers,” Mor told TechCrunch.

Investor Confidence and Future Outlook

Lead investor Sam Altman supports this expansion strategy, highlighting the growth in the gig and creator economies as drivers of increased payment volume and payee numbers.

“By adding enterprise capabilities, we believe Routable has the potential to become a substantial business,” he noted.

This funding round brings Routable’s total funding to $46 million. The company maintains headquarters in San Francisco and Seattle, with a predominantly remote workforce.

Altman also shared that his personal experience with the challenges of high-volume business payments, coupled with observations from working with numerous startup founders facing similar issues, influenced his investment decision.

He was also impressed by Routable’s commitment to an engineering-driven approach.

“Their ability to integrate directly into a company’s financial flow, rather than simply providing an interface for moving money, sets them apart,” Altman explained.

Mor emphasized that the decision to collaborate with founders of leading tech companies was deliberate, aiming to leverage their “extensive enterprise and high-growth experience.”

The B2B payments sector remains highly competitive. Earlier this year, Melio, a platform enabling SMBs to make electronic payments to other companies via bank transfers, debit cards, or credit – with the option of issuing paper checks – secured $110 million in funding at a $1.3 billion valuation.