Pagos Raises $10M to Revolutionize Payment Intelligence

Pagos Secures $10 Million Seed Funding for Payment Intelligence Platform

Pagos, a startup focused on payment intelligence infrastructure, has successfully raised $10 million in seed funding. The company was established by experienced professionals previously holding key positions at Braintree and PayPal.

Building a Data-Driven Solution

Launched earlier this year, Pagos operates as a remote-first organization. It is developing a data “platform” and API-driven micro-services designed for seamless integration with existing payment systems.

The primary objective is to enhance the performance and facilitate the “optimization” of a company’s current payments infrastructure.

Founding Team Expertise

The genesis of Pagos stems from the founding team’s extensive experience within the payments industry. CEO Klas Bäck and CPO Albert Drouart both held senior leadership roles at Braintree/Venmo and PayPal for eight to nine years.

Prior to that, they collaborated at Netgiro, a payment processor later acquired by Digital River. Daniel Blomberg, the company’s CTO, boasts a track record of launching and successfully selling seven startups over the past two decades.

Addressing a Critical Market Need

“We consistently observed that our clients lacked sufficient data, tools, and insights to effectively strategize and optimize their payment processing,” explained Bäck, who previously led Braintree’s international operations and later worked at PayPal.

“This deficiency hinders their agility and complicates their efforts to achieve desired outcomes.”

The Impact of Inefficient Payment Infrastructure

Bäck further noted that this can translate into increased operational expenses, revenue losses, and “unnecessary friction,” ultimately making business strategy execution more challenging than necessary.

Consequently, Pagos has developed a SaaS platform featuring API-driven micro-services to assist businesses in optimizing both their payment processing and its implementation.

Providing Actionable Insights

“Our aim is to empower businesses with the data and insights needed to understand their payment landscape – to answer questions like ‘what does this mean?’ and ‘how can I improve?’” Bäck stated. “We want to deliver these tools in a readily accessible format.”

Investor Confidence

This vision resonated with Underscore VC and Point72 Ventures, who co-led Pagos’ seed round. Additional investors included Amit Jhawar, former Venmo GM and current Accel investor; Bill Ready, Google’s president of commerce & payments; Billy Chen, VP of financial partnerships at Finix and former director of payments at Uber; and Rich LaBarca, GM of Dynamics 365 Customer Insights at Microsoft.

Current and Future Services

Currently, Pagos offers services such as real-time payment data visualizations, automated alerts for payment trends or issues, and up-to-date bank identification number (BIN) details for customer management and cost tracking.

The company plans to expand its offerings to include network tokenization and account updater services in the future.

Scaling for Growth

“Midsize to large companies experiencing online or mobile sales growth often find their payment infrastructure becoming a bottleneck,” Bäck explained to TechCrunch. “We are dedicated to helping them scale efficiently and achieve more with fewer resources.”

Pagos has been collaborating with customers globally, ranging from 50-person companies to organizations processing billions of dollars in online transactions.

Capital Allocation

The newly acquired capital will primarily be used to expand the company’s 20-person team, with a particular focus on hiring engineers, according to Bäck.

Investor Perspectives

Investors have expressed strong confidence in Pagos’ potential.

Chris Gardner, partner at Underscore VC, highlighted the team’s extensive experience working directly with their target customers as a key factor in his investment decision. He stated that this experience “uniquely qualifies them to serve them.”

“Furthermore, their potential market encompasses every e-commerce merchant worldwide – a market comprising millions of businesses,” he added. “These two elements represent a powerful combination for success.”

A Unique Offering

Gardner believes Pagos’ offering is distinctive in both the capabilities of its services and its delivery model. The team intends to introduce over a dozen individual micro-services addressing specific payment optimization challenges, all accessible through APIs.

“And recognizing that a ‘one size fits all’ approach is ineffective,” he noted, “these services are available individually, offering a free trial and scalable pricing.”

Addressing Increasing Complexity

Dave Matter, operating partner of Point72 Ventures, observed that the increasing digitization of commerce has led to more complex and challenging-to-manage payment stacks for merchants.

“Pagos is spearheaded by two of the most accomplished payments product experts in the industry, and their established relationships, deep domain expertise, and firsthand understanding of these challenges are invaluable,” he stated.