Mollie Raises $800M at $6.5B Valuation

Mollie Secures €665 Million Funding, Valuing the Company at €5.4 Billion

A payments processing startup, initially developed by its founder while residing with his parents and operating on a bootstrapped budget, has announced a substantial funding round. This investment positions the company as one of Europe’s most highly valued startups. Mollie, headquartered in Amsterdam, facilitates seamless payment integration for businesses across websites, documents, and various services through its API, and today revealed it has secured €665 million ($800 million) in an all-equity funding round.

Investment Details

Blackstone Growth (BXG), the growth equity investment division of Blackstone, spearheaded the investment. Additional participation came from EQT Growth, General Atlantic, HMI Capital, Alkeon Capital, and TCV. Notably, TCV previously led Mollie’s Series B funding round in September of the previous year.

Significant Growth Trajectory

Mollie has experienced considerable expansion in recent years. The company is projected to process approximately €20 billion (around $24 billion) in payments during 2021, representing a 100% increase compared to the roughly €10 billion processed in the prior year.

Currently, Mollie serves 120,000 monthly active merchants – an increase from 100,000 in 2020 – and boasts a clientele that includes prominent names such as Deliveroo, UNICEF, Acer, and Guess. The company is consistently acquiring between 400 and 500 new customers on a daily basis.

Impact of the Pandemic

The global pandemic undeniably accelerated the shift towards digital commerce, encompassing online purchases, service payments, and financial transactions. This trend also benefited Mollie’s growth.

However, this isn’t the complete picture. Maintaining a similar growth rate this year suggests that the transition to online payments, facilitated by Mollie’s infrastructure, will persist even as the pandemic’s influence diminishes.

Future Growth and Market Position

“A reliable indicator in the payments sector is consumer expenditure, which has risen from 10% to 15-20%,” stated Shane Happach, who assumed the role of CEO in April, succeeding founder Adriaan Mol – also the founder of MessageBird. Mol is affectionately known as “Mollie,” inspiring the company’s name.

Happach explained that consumer spending, and the resulting addressable market, are key metrics for Mollie’s future growth. While the company has been largely profitable since its inception in 2004, the new funding will be strategically allocated to accelerate growth. This includes developing complementary services around payments and expanding into new geographic markets, particularly beyond its core European base, with the support of its new investors.

Competitive Landscape

This expansion will inevitably lead to increased competition. The payments industry is vast and fragmented, with Mollie being just one of many players experiencing growth. Happach, previously with WorldPay for a decade, notes that the top 10 companies control 50% of the market, while the remaining 50% is distributed among approximately 5,000 other entities.

“Many would be surprised to learn that companies like Stripe are among the 5,000, not the top 10,” he clarified. (JP Morgan, WorldPay, Fiserv (First Data), and PayPal are among the leading ten.) This situation presents Mollie with significant opportunities for growth and potential consolidation.

Comparison to Stripe and Future Product Development

Stripe was frequently referenced during discussions, particularly regarding competitive pressures. Like Mollie, Stripe has focused on building a payments platform accessible to customers via a straightforward API. Comparisons were also drawn regarding valuations – Stripe is currently valued at $95 billion – and product strategies.

The overarching conclusion is that Stripe’s success demonstrates the potential market available to Mollie. “We recognize a substantial opportunity within the underserved segment of small and medium-sized businesses (SMBs),” Happach said. “Specifically, in our primary markets, these businesses often encounter cumbersome financial services.”

The company will concentrate on areas where it believes it can outperform existing solutions, complementing its core payments business. These include working capital for SMBs, card issuance and corporate card programs, expense management, and business banking. (Areas where Stripe is also actively involved.)

It will also be noteworthy to observe whether Mollie adjusts its transaction fees as it expands, a practice recently undertaken by PayPal. Happach affirmed that Mollie has no current plans to alter its fee structure.

Organic Growth Strategy

Mollie is unlikely to prioritize acquisitions with the new capital.

“My experience at a company that engaged in numerous acquisitions revealed both advantages and disadvantages,” Happach stated. “For Mollie, we are pursuing an organic growth plan… Acquisitions are always a possibility, but it’s not the primary focus agreed upon with our investors. Currently, our priority is to recruit top talent, strengthen our commercial, product, and engineering teams, and continue to deliver exceptional service to our existing customers.”

Historically, Mollie’s growth has been driven primarily by word-of-mouth referrals, rather than extensive sales or marketing campaigns, a factor that attracted Blackstone’s attention.

Blackstone’s Perspective

“What particularly impressed us at Blackstone was that 90-95% of the hundreds of businesses that sign up with Mollie daily do so without direct interaction with the company,” said Paul Morrissey, head of Blackstone’s European investing activities. “They discover Mollie, appreciate the product, and begin using it, which speaks to the business’s strong unit economics and competitive positioning.”

The company is embarking on a significant hiring initiative, aiming to expand its team from 480 to nearly 800 within the next nine months.