There’s more funding for the business to business payments space this week with news Finexio has raised $1m in new funding.
The San Mateo, California-based startup helps automate payment processing for companies’ accounts payable and procurement and make life easier for corporate buyers and sellers.
So what issues is the firm solving? Finexio pitches itself as an alternative option to traditional ACH and credit card solutions for B2B payments, which tend to be characterised by manual inputting, high fees and complicated processes.
The firm cites data suggesting half of US B2B spend, equivalent to $12 trillion each year is currently happening on paper cheques.
Finexio’s tool plugs into companies’ payables and procurement software and automatically routs payments around existing ACH and credit card rails to automatically find the best price.
CEO and founder Ernest Rolfson says the team’s personal experience in payables and procurement and frustration with existing products like virtual cards led them to build Finexio.
“Having spent years as financial processes consultants and working at large ‘fintech’ and payments companies, we experienced first-hand the paper based, slow manual delivery of virtual credit cards,” says Rolfson.
“These cards are currently mindlessly printed on tens of thousands of pieces of paper monthly, then mailed or faxed to suppliers. Not only are these suppliers forced to undergo a costly manual effort to receive their money, but they also are forced to pay a 3.5-5% fee for processing costs. We knew there was a better way to both pay and get paid as tens of thousands of suppliers, many of them small businesses, deserved better,” he says.
Backing comes from James R Heistand alongside Loeb NYC and a group of “seasoned” fintech angels according to the firm. Heistand is the CEO of Parkway Properties and this seems to be a personal investment. He says Parkway’s finance team faced frustrating options when it came to payables systems, sending “thousands and thousands” of paper cheques each year at an unnecessary cost to the business and to suppliers.
A further £2.5m is expected to be raised from crowdfunding on Tuesday.
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