GPS Raises $300M for API-Based Payments & Embedded Finance

The Rise of Embedded Finance and GPS's New Funding

Embedded finance remains a dominant force within the fintech landscape. A growing number of financial service companies are leveraging existing APIs to facilitate payments and a broader range of financial operations. Global Processing Services (GPS), a key provider of these foundational APIs, has recently secured a substantial funding round of $300 million.

Expanding Global Reach

This capital injection will be utilized to further expand GPS’s business operations on a global scale. The London-based company, known as GPS, currently serves numerous prominent clients across 48 countries. These include well-known names such as Revolut, Curve, Starling Bank, Zilch, WeLab Bank, and Paidy.

Investment Details and Stakeholders

The investment comes from two leading private equity and venture capital firms: Advent International and Viking Global Investors. Following this transaction, these firms will jointly hold a controlling interest in GPS. While the company has not disclosed its current valuation, details will be updated as they become available. Visa, which previously made a strategic investment in October 2020, will continue to be involved.

Strategic Partnerships and Platform Enhancement

This deal provides GPS with not only financial resources but also valuable partnerships to facilitate deeper market penetration and potential technological advancements. According to Joanne Dewar, CEO of GPS, “We are delighted to partner with Advent and Viking, with their deep experience and track record in payments and fintech, and, who share our bold vision for the next generation of global payments.”

A Competitive Landscape

This investment represents a significant contribution to the embedded finance sector, though it is not an isolated event. Rapyd, a major competitor, also secured $300 million in funding in August of this year, achieving a valuation of $8.75 billion. Other notable players include Checkout, valued at $15 billion, and Railsbank, which raised $600 million earlier in 2023.

Drivers of Growth in Embedded Finance

The success of these companies can be attributed to two primary factors. Firstly, there has been a surge in innovative, mobile-first financial services offering consumers and businesses more intuitive experiences, improved service, competitive rates, and a wider array of options. Secondly, the underlying financial services powering these new brands are often standardized and challenging to develop independently.

GPS's Position and Achievements

This has fostered a thriving ecosystem of fintech companies that have invested in building these core services and now offer them to multiple clients through APIs. GPS has established itself as a strong contender within this ecosystem. To date, the company has issued 190 million physical and virtual cards, integrated with 95 issuer partners, and secured a strategic partnership with Visa.

Expansion into New Regions

Furthermore, GPS has successfully expanded its operations into the Asia Pacific and Middle East regions, a noteworthy achievement given the often-localized nature of the fintech industry. This expansion, coupled with the broader embedded finance trend, likely contributed to the company’s ability to attract this significant investment.

Investor Perspective

Peter James, director at Advent International, stated, “GPS provides key payments technology infrastructure, enabling the global fintech revolution. Their agile, resilient and modern cloud platform drives some of the most innovative use cases and allows fintechs to globalise through a single API.” He further added, “Through their customer-centric innovation, GPS has quietly established a leading position in key markets around the world with an attractive, diversified and global customer base. Together with Viking, we look forward to supporting GPS’ leadership team to expand the business’s product offering and accelerate its international reach.”