Finix announced today that it has raised $30 million in new venture capital, bringing its total known raised to $133 million. The round comes nearly two years after the do-it-yourself payments company closed a $30 million extension to its $35 million Series B and about 18 months after it raised a $3 million SPV led by LatinX and Black investors.
The cash tranche is significantly smaller than its extended Series B total, but Finix did include that new investors participated in the round, meaning this one is not an extension round, “thanks to the growth” that it has shown in the last six months.
New and existing backers The General Partnership (TheGP), Franklin Templeton, Acrew Capital, American Express Ventures, Bain Capital Ventures, Cap Table Coalition, Homebrew, Insight Partners, Inspired Capital, Lightspeed Venture Partners, Precursor Ventures, PSP Growth and Vamos Ventures participated in the company's latest round.
Finix did not disclose its valuation, noting in press release — while acknowledging “the current funding environment — that the capital was raised this summer and “occurred at an increased valuation.” TechCrunch reached out to Finix for further comment but had not heard back at the time of writing.
The SaaS startup's core business helps software companies process their own payments through flexible software, though it has since expanded into being a direct payments facilitator itself. The company sits aside companies like Stripe, which it is not subtle about competing with.
One month after the startup raised its 2020 Series B led by Sequoia in 2020, the venture firm walked away from the deal, reportedly returning to Finix a $21 million check representing the full value of its investment along with its board seat, information rights and shares. TC’s Connie Loizos reported at the time that Sequoia decided to pull back because it decided Finix competed directly with Stripe, one of its portfolio darlings.
In May of this year, Finix doubled down on the Stripe competition when it announced it would directly facilitate payments through its in-house platform, which it had not historically been able to do as just an API provider. Its transition to direct facilitation allowed it to capture smaller customers below its previous sweet spot of serving customers with ~$50 million in transaction volume. It also entered the in-person payments space to allow different types of businesses to accept credit card payments. As it often goes in fintech: the broader, the better.
The two moves put Finix squarely on Stripe’s turf, though its CEO and co-founder Richie Serna told TC’s Mary Ann Azevedo that Finix differs from Stripe in its focus on creating an open ecosystem. Serna likened his company to Android and Stripe to Apple, which has notoriously worked to keep its iOS platform closed.
“We were building technology that would take a three-year in-house build by dozens of engineers, with tens of millions of dollars of technical R&D and investment, and taking that down to a number of months by getting developer-friendly APIs to start monetizing their payments,” he told TechCrunch in a May interview. “That was our biggest core offering. What we’ve done now is become the payments facilitator ourselves, so that we can not only provide the payments, but also all the back office requirements and compliance certifications, so that our customers can get up and running in a matter of days, rather than months.”
In a press release announcing its new cash, the company says that Q2 2022 was its best quarter ever in terms of new deals closed. It is welcome news in a quarter that saw mixed messages for fintech. So, clearly, Finix's strategy shift has made a difference enough to get a cadre of investors to put money into the venture-backed company.