Settle Bags $60M to Revolutionize E-commerce Bill Payments

Settle Secures $60 Million in Series B Funding

Settle, a cashflow management startup, has announced a second funding round within five months, successfully raising $60 million in Series B financing. This investment positions the company to establish a strong foothold in the expansive $25 trillion business-to-business (B2B) payments sector.

Company Origins and Core Functionality

Founded in 2019 by Alek Koenig, a former head of credit at Affirm with four years of experience, Settle initially aimed to provide alternative lending solutions for businesses. The platform now integrates payments, financing options, and accounting tools into a unified system.

This integrated approach is designed to facilitate accelerated scaling for brands. It addresses a growing need in the market.

Addressing Supply Chain Challenges

The global pandemic significantly disrupted supply chains, creating difficulties for numerous brands. Many companies experienced rapid sell-outs followed by prolonged inventory shortages, exceeding standard payment terms of 30 to 45 days.

Settle alleviates these pressures by assuming upfront vendor costs and offering brands flexible financing arrangements.

How Settle's Financing Works

“Our distinctive offering involves extending payment timelines,” explained Koenig in an interview with TechCrunch. “We directly compensate our customers’ vendors using Settle funds, allowing the company to repay us over a period of 30 to 120 days.”

This model enables businesses to utilize revenue generated from sales, such as inventory turnover, to manage their repayment obligations.

Current Clientele

Settle currently serves a diverse range of customers, including Italic, Huron, Brightland, Branch, and Better Booch. Rebecca Zhou, the founder of Soft Services, highlighted Settle as “a game changer” for her skincare company.

The platform’s financing capabilities were instrumental in supporting inventory purchases and fueling continued growth.

Investment Details

The latest funding round was spearheaded by Ribbit Capital, with contributions from Kleiner Perkins, Caffeinated Capital, Activant Capital, and Stripes. This follows a $15 million Series A round led by Kleiner Perkins five months prior.

To date, Settle has secured a total of $100 million in funding.

Strategic Growth and Board Expansion

While not initially seeking additional funding, the company’s rapid customer acquisition, transaction volume, and lending activity prompted a reassessment. This also presented an opportunity to welcome Nick Shalek, a general partner at Ribbit Capital, to Settle’s board of directors.

E-commerce Trends and Settle’s Value Proposition

Shalek noted the continued expansion of the e-commerce landscape, even amidst the COVID-19 pandemic. He emphasized that businesses are increasingly recognizing e-commerce as a core component, or at least a significant aspect, of their operations.

Settle empowers companies to concentrate on core growth drivers by streamlining back-office processes.

Investor Confidence

“My investment is rooted in the strength of the team – Alek and Shane (Moriah, CTO) possess both the talent and the relevant experience to effectively address this challenge,” Shalek stated. “Their profound understanding of risk and capital markets is evident.”

He further observed substantial market demand and consistent, exponential growth, alongside successful talent acquisition and the benefit of favorable e-commerce trends.

Impressive Growth Metrics

Throughout 2021, Settle experienced a 20-fold increase in revenue and expanded its merchant base to 500 since the previous summer.

Future Plans

The newly acquired capital will be allocated to accelerate product development and expand the team, with a primary focus on hiring engineers. Koenig anticipates growing the workforce from 40 to 100 employees within the next year.

“This equity unlocks access to debt, which is essential for our operations,” Koenig explained. “The heightened customer demand allows us to secure additional debt and advance our product roadmap.”