Paystand Secures $20 Million in the Series B Funding Round

Paystand has secured $20 million in investments to help the development of its products and expand its team. The company provides Venmo-like payment services to enterprises.

This was a Series B funding round and some of the investors included DNX Ventures, Battery Ventures, Epic Ventures, Commerce Ventures, and Wildcat Ventures. Existing investors Leap Global Partners and BlueRun Ventures participated as well.

BlueRun Ventures was also one of the investors of PayPal in its early rounds. It stopped being PayPal’s investor when it got acquired by eBay in 2002 for $1.5 billion. eBay spun off Paypal back in 2015, and today, its market cap is around $140 billion.

“We’ve seen significant disruption in consumer payments from companies like Venmo, PayPal, and Square Cash,” said Mitch Kitamura, the managing director at DNX Ventures. “However, US B2B [business-to-business] payments represent an even larger opportunity — currently over half of the $25 trillion in B2B invoices are still paid in a paper check.”

Paystand’s Chief Executive Jeremy Almond said the company plans to digitize and automate the enterprise cash cycle, a process which takes around a month or more. The company operates on a subscription-based model, as opposed to other payment service providers which operate on a transaction-based model.

“It’s like Venmo for complicated transactions for commerce,” Almond said. “We are rebooting the financial infrastructure because a lot of it was built pre-internet. It holds companies back. We’re coming in with a new business model, doing payments-as-a-service.”

The platform automates the cash cycle from invoice to reconciliation and integrates with client businesses’ databases.

Almond said Paystand could save enterprises more than 50% on the cost of accepting payments and processing invoices and cut DSO (days sales outstanding) by over 60%.

Paystand teamed up with companies such as the Tokyo-based credit-card company JCB, consumer goods company Allied Aerofoam, as well as Vast Bank. The company also said its clients are “two of the largest airlines, eight of the top 10 pharmaceutical companies” as well as “all five branches of the US military”.

According to the company’s statement, 160,000 enterprises are currently operating on its payment network.