B2B Payments is HOT !
Just ask Any VC !
I was reading about Melio another hot B2B payments startup that raised funds advised by…no surprise FT Partners. (Seriously is there any Fintech deals that Steve and the Crew haven’t done?)
Look at these names, just WOW. It seems like just a few years ago you would be hard pressed to get a Term Sheet as a B2B payments founder, now it seems likely you could get one by announcing a B2B payments idea.
If you think I am exaggerating, check out this tweet from a16z’s Angela Strange…
Ok, she doesn’t say B2B but let’s face it based on the FT Partner’s market landscape you would be hard pressed to not get this a16z EIR gig with a great B2B payments idea.
Back to Melio and the others on the map. Why so much and why now? Simply put the Consumerization of B2B payments. Why would we think the head of procurement for John Deere tractors would accept horribly antiquated interfaces and payments for commercial payments when she is using her iPhone on the weekend to buy gas. We did think that and maybe the Pandemic helped change it, but it has changed.
One driver is B2B Marketplaces, I wrote about this trend recently, it is an exploding space and covered by Bessemer Ventures in a subsite on their website. https://www.bvp.com/atlas/b2b-marketplaces/
Basically these new vertical marketplaces need an easy checkout, same as we now enjoy on Amazon.
Payment and working capital focused companies from this non-exhaustive view on B2B Marketplaces have raised over $812 million in the last 18 months or so. If I had time I am sure I could expand this to easily $1B . Note I exclude Modern Treasury and Stripe as they are much more beyond B2B Marketplaces.
I started this blog with Melio, so let me tell you what they actually do:
The simplest way to pay vendors & contractors
Pay any invoice with a bank transfer for FREE, or use your credit card to defer payment (2.9% fee). Vendors receive a check or a bank deposit.
That is from the Melio website and so is this point about platforms including B2B Marketplaces
Integrate B2B payments into your platform
Melio’s APIs and embedded solutions can easily enable Accounts Payable/Receivable capabilities for SaaS, B2B Marketplaces or Financial Institutions partners.
The whole world of B2B payments really opened up with the advent of APIs and open architecture. Now anything seems possible which makes it a mystery why so many businesses still used outdated systems and processes for their B2B payments.
Also on the list is Resolve, a B2B BNPL for B2B Marketplaces…that is a lot of B’s. But their pitch is similar to Melio’s “Simple Checkout for B2B buyers”
I absolutely LOVE all the funding, innovation and energy pouring into B2B payments right now. If you have an idea and know a coder, go build something and let the world know about it.