The Future of Fintech: Helping Businesses Grow Through Digital Payments
Why Chingona Ventures Invested in Finix & PaerPay
At Chingona Ventures we believe that technology can provide transformational opportunities for individuals and business owners to make informed financial decisions, grow their business, and ultimately build wealth. This awesome power for wealth generation is why we love investing in fintech.
Over the past few years, we have made several investments focused on empowering consumers and communities to take control of their financial futures including investments in SUMA Wealth, Reel, Curu, and EarlyBird. Today, we are excited to share our perspective on two fintech investments focused on empowering businesses to accelerate growth, diversify revenue streams, and reduce costs through digital payments.
We believe in backing amazing companies that enable businesses to unlock additional potential. Finix and PaerPay — welcome to the Chingona Ventures Portfolio.
Digital Payments: The Future of Financial Transactions
Digital payments are one of the fastest growing sectors within the fintech landscape accelerated by the expansion of the digital economy, increasing integration with merchant point of sale (POS) solutions, and rapid innovation in payment processing technology. An estimated $1.2 trillion of digital payments were processed in the United States in 2019, a number that is expected to triple to $3.3 trillion by 2023, with accelerated growth due to the COVID-19 pandemic. Consumers were first to adopt digital payments, but B2B payments are expected to represent the majority of transactions in the new few years.
Within this segment, payments companies provide payment authorization, processing, and settlement services for digital transactions. These firms typically generate revenue by taking a percentage of the transaction volume or recurring revenue based on access to the banking APIs.
Finix: Enabling Every Company to Be a Fintech Company
With their payments infrastructure-as-a-service platform, Finix helps growing software businesses manage payment processing internally to accelerate growth and diversify revenue streams. With modular, workflow-driven architecture, Finix simplifies the transition for companies looking to bring payments in-house. This transition previously could take up to 2–3 years, lots of engineering resources, and millions of dollars, but with Finix the transition can be completed in as quickly as a few weeks at a fraction of the cost. Focused on fast-growing software companies that process $50 million or more in payments, Finix enabled its customers to increase take-home fees from 0.25% to 0.65% on average (a 2.6X improvement in top-line growth potential). The Finix platform is the internal infrastructure that enables every software company to become a fintech company.
Learn more about Finix, here.
PaerPay: Contactless Solutions for Restaurants of the Future
Paerpay provides integrated contactless payment and ordering solutions for restaurants and other vendors. Their innovative technology integrates into existing POS solutions and enables guests to view, split, and pay their bills through text message or QR codes — eliminating the need for both end customers and businesses to download new apps or setup new hardware. Growing prior to the global pandemic, PaerPay has seen rapidly accelerating growth as local businesses transition from cash to contactless digital payments in response to COVID-19. The PaerPay solution delivers tangible ROI through increased average check sizes (>$11/transaction) and higher tip averages for waitstaff (+65%). The platform also increases the ability for restaurants to recover lost income from walkouts and maintain PCI compliance for digital transactions. Even after the pandemic is (finally) long gone, we expect that contactless payment solutions are here to stay.
Learn more about PaerPay, here.
The Chingona Factor: The Founders That Make These Solutions Stand Out
Digital payments is a rapidly changing segment of the fintech ecosystem, with new technology and new entrants into the market every day. At Chingona Ventures, we not only chose to back Finix and PaerPay because they have great products, impressive early results, and incredible market potential, we backed these companies because they have amazing founders.
Richie Serna, Finix Co-Founder/CEO, is a child of Mexican immigrants who graduated from Harvard and moved to San Francisco. Richie taught himself how to code and worked at a payments startup (Balanced) prior to starting Finix. Hear more about Richie’s story, here.
Derek Canton, Founder/CEO of PaerPay, founded the company after winning the Money 20/20 hackathon in 2017 and worked on the business part-time while at Dell EMC. Derek bootstrapped the business by living at home with his parents and operating a consulting side hustle until he gained enough traction to focus on PaerPay full time. Learn more about Derek’s story, here.
Sources: Pitchbook, Emerging Tech Report: Fintech Q3 2020.
