Not even a month has gone by and we already have 2021’s first Israeli Unicorn. Fintech startup Melio Payments, which was founded just 18 months ago, continues its funding success - $140 million in September 2020 - by announcing a $110 million Series D round. The investment was led by Coatue Management, with existing investors Accel, Corner Ventures, Bessemer Venture Partners, American Express Ventures, Aleph, LocalGlobe, General Catalyst, and Salesfore. Melio joins the Unicorn club with a $1.3 billion post money valuation.
"We thought it would take three years"
Fintech firm Melio Payments has developed a supplier payment system for small businesses. The service, which is currently available only in the U.S., enables small businesses to digitize their payments to vendors and contractors, replacing the more traditional method of mailing a check through the post office - a method commonly used in the U.S. still today.
Users can access the service through Melio’s website; scan an invoice or manually enter the details, and schedule a time for payment. The company’s application will automatically deduct the requested amount from the business, and offers both check-by-mail and direct deposit payment options. In addition to the time and cost saving offered by the system, it also links up with various financial institutions and provides fraud prevention security for its users. Since the 2019 launch of the product, Melio has processed billions of dollars in payments.
While chatting with Geektime, CEO and co-founder, Matan Bar explains that the company hadn’t predicted such significant growth over the last year. “In 2020, a multitude of digital payment companies, including Melio, enjoyed substantial growth. We thought it would take three years to reach growth that happened over this past year.
Melio are no strangers to fundraising during COVID, with most of its raised capital coming during the ongoing pandemic. Bar notes that it’s relevant to the whole Fintech sphere, and not just his company. “The transition to digital business has sparked incredible momentum in the industry. If Venmo helped people transfer cash (C2C) and PayPal helped people transfer cash to businesses (C2B), then Melio helps make the digital transition with businesses paying other businesses (B2B),” adds Bar.
He continues to tell that small businesses had growing need for a digital solution, which was magnified when adding the social distancing factor of the pandemic, making Melio’s system highly valuable. Bar adds that Melio’s remote payments management system has become crucial for small businesses: “More often it happened that many small business owners found themselves with cash flow issues and delays. Melio created a wide array of tools to help businesses overcome cash flow challenges, by enabling payment defaults and quick-pay options.”
Melio was founded in 2018 by Matan Bar, COO Ziv Paz, and CTO Ilan Atias. Bar sold his first startup - The Gifts Project - to eBay back in 2011. To date the company has raised $256 million, and plan to reinvest the new funds in talent recruitment, and expanding marketing and sales efforts in the U.S. small business market.