Balance Raises $25M Series A to Revolutionize B2B Checkout
Balance Secures $25 Million Series A Funding to Revolutionize B2B Payments
Balance, a payments platform focused on business-to-business (B2B) transactions for merchants and marketplaces, has successfully closed a $25 million Series A funding round. The investment was spearheaded by Ribbit Capital.
Investment Details and Backers
Avid Ventures also participated in this financing round. Existing investors, including Lightspeed Ventures, Stripe, Y Combinator Continuity Fund, SciFi VC, and UpWest, continued their support.
Notable individual investors contributed to the round as well. These include former leaders from prominent financial technology companies like Plaid, Coinbase, Square, and PayPal, such as Jaqueline Reses, previously the head of Square Capital.
This latest funding arrives just over half a year following Balance’s announcement of a $5.5 million seed round.
The Core Problem Balance Addresses
According to CEO and co-founder Bar Geron, the impetus for creating Balance stemmed from a simple desire: “We aimed to develop an online B2B experience that is genuinely user-friendly.” He and Yoni Shuster, both formerly of PayPal, initiated the company in early 2020.
Historically, B2B payments have differed significantly from business-to-consumer (B2C) transactions. Unlike the immediate payment common in B2C, B2B payments typically occur within a 30-day timeframe, relying on invoices. The company argues this process is inefficient for both buyers and sellers.
Furthermore, many businesses have traditionally avoided using credit cards for supply purchases due to concerns about reaching credit limits, Geron explained.
Payments as a Bottleneck for Growth
“Payments represent the primary obstacle preventing many merchants from operating online,” Geron stated in an interview with TechCrunch. “This process is often constrained within marketplaces, hindering their ability to expand. We became deeply interested in resolving this challenge.”
Balance’s Solution: A Modern B2B Checkout
After participating in the Y Combinator program, Balance has created what it terms a “consumer-like B2B checkout platform for merchants and marketplaces.” Alternatively, it can be described as a self-service digital checkout solution tailored for B2B businesses.
The platform enables merchants to accept a diverse range of payment methods, including ACH transfers, credit and debit cards, checks, and bank wires. It also supports various payment terms, such as payment upon delivery, net payment terms, and milestone-based payments.
Balance assesses the risk associated with each transaction requiring financing, evaluating the customer, the merchant, and the chosen payment terms. Built on top of Stripe, Balance incorporates all of Stripe’s credit card processing capabilities while extending far beyond them.
Robust API Platform for Marketplaces
Geron emphasized Balance’s significant investment in Application Programming Interfaces (APIs) specifically designed for marketplaces.
“Our API platform is exceptionally robust, allowing businesses to manage the entire payment process without directly handling the complexities of payment risk and regulations,” he explained to TechCrunch. “This entire process occurs without them ever needing to access the funds directly.”
Benefits for Merchants and Marketplaces
Merchants benefit from immediate payouts that are consistently reconciled, functioning similarly to credits. Marketplaces gain access to automated vendor disbursement, comprehensive compliance support, and streamlined reconciliation management, according to Balance.
“Our goal is to replicate the seamless online payment experience consumers enjoy for businesses, and we intend to achieve this on a global scale,” Geron told TechCrunch.
Strategic Partnerships and Customer Base
Balance has already established partnerships with major e-commerce platforms like BigCommerce and Magento. A collaboration with Salesforce is also planned, according to Geron.
Its customer base includes a wide spectrum of businesses, from startups to publicly traded marketplaces and large e-commerce enterprises. These companies operate across diverse industries, including steel, freight, hardware, food ordering, medical supplies, and apparel. Examples include Bryzos, Choco, Zilingo, and Bay Supply.
Rapid Growth and Team Expansion
While still in its early stages, Balance has experienced substantial growth, with a reported increase of 500% to 600% since its last funding round in February. The company maintains offices in Tel Aviv and New York and currently employs approximately 30 individuals.
Ribbit Capital’s Perspective
Jordan Angelos, a general partner at Ribbit Capital and former head of M&A and investment at Stripe, highlighted Balance’s strategic focus on “rapidly scaling” B2B marketplaces and merchants as a key strength.
“B2B marketplaces have unique payment and capital markets requirements that Balance’s flexible toolkit can address more comprehensively and effectively than existing alternatives,” he stated via email. “Payments and checkout are interconnected, and Balance’s products enable users to manage both aspects to better serve their customers and improve their profitability.”