Rapyd Raises $300M at $8.75B Valuation

The Rise of "Finance Anywhere" and Rapyd's $300 Million Funding

Financial technology startups and the concept of accessible financial services are experiencing substantial growth. Rapyd, a company central to providing the infrastructure for these services, has announced a significant funding round to capitalize on this momentum.

Rapyd Secures $300 Million in Series E Funding

Rapyd, a provider of financial solutions including payments, mobile wallets, money transfers, card issuing, and fraud prevention – all accessible through an API – has successfully raised $300 million in a Series E funding round. Sources indicate this values the company at $8.75 billion.

Accelerated Growth Driven by Digital Transformation

The company’s growth has been notably rapid, largely due to the global shift towards online activity prompted by the COVID-19 pandemic. Rapyd is projected to exceed $20 billion in total payment volume this year, representing a four-fold increase from the $5 billion recorded in 2020.

A Diverse Client Base

Currently, Rapyd serves approximately 12,000 small and medium-sized businesses. Additionally, the company has secured 650 large enterprise clients who utilize its services.

Investment Details and Key Backers

Target Global, a European venture capital firm focused on fintech and commerce, led this funding round. New investors include Fidelity Ventures, Altimeter Capital, Whale Rock Capital, BlackRock, and Dragoneer. Existing investors, such as General Catalyst, Latitude, Durable Capital Partners, Tal Capital, Avid Ventures, and Spark Capital, also participated.

Strategic Acquisitions and R&D Investments

Rapyd’s CEO and co-founder, Arik Shtilman, stated that the investment will be allocated to both strategic acquisitions and research and development (R&D) initiatives.

Expanding Market Reach Through M&A

Rapyd has already begun pursuing acquisitions, having acquired Valitor, a payments and card issuing company, in July for $100 million to strengthen its presence in Europe. The company also launched Rapyd Ventures, an investment arm, to further expand its reach.

A Comprehensive Suite of Financial Services

Rapyd’s API currently encompasses around 900 services covering 100 countries. The company’s offerings can be described as a comprehensive “Swiss Army knife” of financial tools.

Core Financial Service Categories

According to Shtilman, the fundamental components of financial services are payment collection, money disbursement, funds storage, card issuing, and foreign exchange. These elements form the basis for a wide range of capabilities.

Focus on Identity Management and Fraud Prevention

A key priority for R&D will be enhancing its technology related to identity management and fraud detection, complementing its existing services.

The Importance of KYC and Compliance

Shtilman emphasized that robust “Know Your Customer” (KYC) and compliance tools will facilitate faster customer onboarding.

Rapid Growth and Valuation Increase

This funding round arrives just seven months after Rapyd’s previous $300 million Series D round, which closed in November. Revenues have grown 3.5 times since the Series D, resulting in the current $8.75 billion valuation.

The Rise of Embedded Finance

The current market is witnessing a surge in embedded finance – financial services integrated into non-financial platforms via APIs. This trend is driving innovation in areas like neobanks, e-commerce, and customer engagement.

Competitive Landscape

Rapyd operates in a competitive market alongside companies like Fast, Checkout, Mambu, and Railsbank, all of which have secured substantial funding.

Rapyd’s Pioneering Role in Fintech Infrastructure

Founded in 2016, Rapyd was an early proponent of fintech infrastructure. Initially met with skepticism, the company’s vision has gained widespread acceptance.

The Evolution of Financial Infrastructure

Shtilman notes that financial infrastructure, while complex to build, is fundamentally similar across organizations. This allows for the creation of standardized, cloud-based services that can be customized to meet specific needs.

Focus on Customer Relationships

The true value lies in customer relationships. Transactional services that enhance existing business offerings or create new engagement opportunities are crucial for fostering customer loyalty.

Market Opportunity and Investor Confidence

The vast potential of this market attracts significant investor interest, as it’s large enough to support multiple successful players.

Target Global’s Perspective

Mike Lobanov, general partner at Target Global, highlighted Rapyd’s role as a critical infrastructure provider for digital businesses operating globally. He emphasized the need for a partner that can bridge the gap between local payment services and merchants, providing scalable and flexible solutions.