Paysend Raises $125M at $700M+ Valuation

The Growing Fintech Landscape and Paysend's Rise

An increasing number of individuals are utilizing online platforms for payments and peer-to-peer transactions. Consequently, companies developing the underlying infrastructure for these activities are attracting significant investment.

Paysend Secures $125 Million in Series B Funding

Paysend, a fintech company specializing in mobile payments, has recently secured $125 million in a Series B funding round. The London-based startup provides international money transfers, global accounts, and business banking/e-commerce solutions for small and medium-sized businesses (SMBs).

CEO and founder Ronnie Millar stated the funds will be allocated to geographic expansion, personnel recruitment, and the continued development of new fintech products.

Investment Details

One Peak led the funding round, with participation from Infravia Growth Capital, Hermes GPE, Plug and Play, and other investors.

While Paysend hasn't disclosed its current valuation, Millar described it as a "substantial increase" and a positive step towards achieving unicorn status.

Estimates, based on a previous valuation of $160 million and a 4.5x growth in core metrics, suggest a current valuation of approximately $720 million – a figure corroborated by a source familiar with the company.

Rapid Growth and Market Position

Paysend has rapidly expanded its user base, reaching 3.7 million consumer customers and 17,000 small business customers in under four years, with just $50 million in prior funding.

The company currently operates in 110 countries, facilitating both transfers and global account services.

Competitive Landscape

Paysend operates in a competitive market alongside established fintech companies like Wise, PayPal, and Revolut, all offering similar services such as money transfer, global payments, and banking solutions for SMBs.

However, Paysend’s growth demonstrates a significant market opportunity for multiple players beyond just a few dominant companies.

The World Bank reported $540 billion in remittances to low- and middle-income countries last year, despite a COVID-19 related dip. Paysend’s business model, which includes commission charges, flat fees, and exchange rate margins (currently £1 per transfer in the U.K.), allows it to capitalize on these substantial volumes.

The demand for services catering to small businesses and the increasing shift towards online commerce also present considerable opportunities.

Addressing Inefficiencies in International Payments

Paysend highlights the inefficiencies in current international payment systems. McKinsey research indicates that approximately 70% of international payments are still conducted using cash, incurring average fees of up to 5.2% and taking up to an hour for both sender and recipient to complete a transaction.

Paysend claims to reduce these fees by up to 60%.

A Vertically Integrated Approach

Unlike many fintech companies that rely heavily on APIs, Paysend has adopted a vertically integrated approach, building its entire infrastructure in-house.

Ronnie Millar explained that this allows Paysend to understand consumer needs and deliver services at a lower cost. He emphasized the cost-efficiency and profitability of maintaining complete control over its technology.

While not currently profitable, investors are confident in Paysend’s strategy for achieving profitability. The company also collaborates with other firms, including API providers, to enhance its services, as demonstrated by its partnership with Plaid to facilitate open banking transfers.

Investor Confidence

Humbert de Liedekerke, managing partner at One Peak Partners, expressed excitement about Paysend’s growth potential and its ability to capitalize on the increasing adoption of digital payments.

He specifically noted the opportunities in serving business customers and expanding internationally to meet the demand for fast, affordable cross-border digital payments. He praised Paysend’s customer focus and continuous innovation, expressing enthusiasm for backing the team in its next phase of growth.