Driven by circumstances surrounding the worldwide COVID-19 pandemic, a growing number of businesses are transitioning their commercial and financial operations online, and a key enabler of this shift has just announced a substantial funding round to broaden the scope of its offerings.

Rapyd, a provider of an API-driven “fintech-as-a-service” platform encompassing payments, banking functionalities, fraud prevention, and more, has secured $300 million in funding. According to CEO and co-founder Arik Shtilman, this capital will be allocated to expanding the company’s personnel, developing further technological capabilities – with a focus on enhanced fraud identification services and a more extensive marketplace – and strategically pursuing select acquisitions.

Rapyd currently serves approximately 5,000 businesses, including marketplaces for both labor and goods, e-commerce companies, diverse lending institutions, and any organization seeking to integrate transactional or novel financial services into its overall business model. Shtilman indicated that the company is currently experiencing its most significant period of growth, adding roughly 500 new clients on a weekly basis.

The investment reflects a $2.5 billion post-money valuation for Rapyd, as confirmed by Shtilman. (For reference, Rapyd’s previous valuation stood at $1.2 billion in December 2019.)

This Series D funding round is spearheaded by Coatue, a prominent growth-stage venture capital firm. Participating investors include Spark Capital, Avid Ventures, FJ Labs, and Latitude (all new investors), alongside General Catalyst, Oak HC/FT, Tiger Global, Target Global, Durable Capital, Tal Capital, and Entrée Capital (all returning investors). Notably, Stripe, a significant player in the API-based financial services sector, is also among the past investors.

Similar to other companies operating in sectors that have witnessed a substantial increase in demand over the past year, financial services – particularly those facilitating online transactions via the internet or mobile devices – have proven to be essential and widely utilized. (This is understandable, given the continued need to cover expenses, purchase goods, and secure loans.)

This funding round was considered an opportunistic move, undertaken not out of necessity to maintain operations or extend financial runway, but because Rapyd was presented with favorable terms and identified strategic opportunities to utilize the funds for business expansion.

“We hadn’t initially planned to raise capital at this time, but our business experienced a surge in activity following the onset of the pandemic,” Shtilman explained. “Existing investors approached us about accelerating our growth beyond our original plans after we achieved our 2021 objectives within just three months in 2020. Consequently, we determined that the timing was opportune for ambitious expansion.”

Shtilman acknowledged that the company’s trajectory has dramatically changed from its early stages, when “investors were hesitant due to concerns about the difficulty of execution. Even our initial backers suggested focusing on a more limited scope. However, we believed that a global approach was essential from the outset. Over the years, the need to articulate our value proposition has largely diminished.”

Rapyd recognized in 2017, upon its launch (originating in Israel), that the global commerce and financial landscape is characterized by significant fragmentation. Consumers and businesses in different markets have distinct payment preferences and requirements, regulations vary, and key industry players differ across countries.

Meanwhile, APIs have long served as a valuable tool for integration and connectivity: By utilizing a few lines of code – assuming your own services are code-based – you can seamlessly integrate services and incorporate readily available functionalities, reducing development effort and allowing you to concentrate on enhancing your core business.

While companies like Stripe, Twilio, and others have recognized the potential of leveraging APIs to expand functionality to a broader customer base, Rapyd distinguished itself by offering not just a few services, but hundreds – even thousands – within its platform. In the fintech space, where services are complex and numerous, and the potential customer base is vast, a wide-ranging approach is advantageous.

This strategy is both intelligent and aligned with the economies of scale inherent in e-commerce and fintech: Individual transactions are inherently incremental, making services that aggregate many transactions capable of generating substantial returns.

However, this is not a unique insight, and Rapyd now faces competition in the market.

Just recently, Germany-based Mambu, which also provides an API-based suite of services (totaling 7,000 at last count) under the concept of “banking as a service,” secured $135 million at a valuation exceeding $2 billion. Stripe, an investor in Rapyd, continues to broaden its service offerings beyond payments. Thought Machine also completed a significant funding round last year, and Temenos and Italy’s Edera are also prominent competitors.

The substantial opportunity in this field is also attracting new entrants, such as Unit, a U.S.-based company that emerged from stealth in December with a strong list of backers.

“Regardless of size, building financial infrastructure requires numerous components, and expanding into multiple jurisdictions necessitates a comprehensive range of services,” Shtilman emphasized regarding the need for scale and breadth in a fintech platform. He also expressed confidence regarding the competitive landscape.

“Competitors have emerged rapidly,” he stated. “But a lack of competition indicates a lack of market opportunity, which is a positive sign. It demonstrates substantial demand. Currently, we hold the position of market leader, and we anticipate becoming the AWS of this space.”

This perspective is shared by investors like Coatue.

“The payment environment differs significantly across countries. A globally operating company may need to support hundreds of local payment methods. Rapyd’s API, which simplifies this complexity, is currently empowering many of the world’s most innovative companies,” said Kris Fredrickson, managing partner at Coatue, in a statement. “We are pleased to partner with Arik and his team for the next stage of Rapyd’s development.”