Fresh Ink! Welcoming Proper, the financial infrastructure platform transforming reconciliation for fast-growing fintechs
The Ink: Proper’s $4.3M Seed funding
Founders: CEO Kyle Maloney and CTO Travis Gibson
The opportunity: One seemingly universal truth of a scaling business is that as the business grows, so do complexities. This is especially true for companies that handle payments and manage transactions trying to make sense of multiple providers and workflows. While teams should ideally devote themselves to improving the user experience and driving business growth, the reality today is that too much time and resources are spent managing financial operations which entail chasing down data sources across a variety of different systems just to get a basic understanding of transactions to account for money. Activities as theoretically straightforward as reconciliation — the essential accounting process meant to ensure every transaction agrees with another — can become major challenges. In fact, we’ve heard operators at large fintechs and marketplaces consistently list reconciliation as one of their top three pain points.
Up to now, companies address this issue either by building large financial operations teams responsible for manually reconciling transactions or spending precious engineering resources developing in-house solutions to try and streamline reconciliation, investigation, and reporting. Neither route is ideal. Not only do in-house solutions take months, if not years, to build, they’re difficult to conceptualize and design up-front and require constant iterations and revisions. On the flip side, finops teams (regardless of how many people are on them) struggle to keep up with the volume — these teams are constantly in a state of fire drill because the sprawl of systems and information silos inevitably leads to a dizzying array of payments and fintech stacks.
Take the case of Marqeta, the innovative card issuing platform. As the company grew, it increased the number of partner banks as well as the types of financial products they offered to customers. The complexity of reconciling across these disparate systems quickly became too much to handle without a core source of truth helping reconcile balances across internal, partner, and customer systems — so Marqeta, like many businesses in its position, undertook a massive initiative to address it.
Enter Proper co-founders Kyle Maloney and Travis Gibson. As leaders on the product and engineering teams at Marqeta, Kyle and Travis learned valuable lessons about what robust ledgering and reconciliation should look like on day one. It wasn’t long before they realized that this was a near-universal pain point for any business dealing with large volumes of transactions across a growing number of systems and ledgers. This was the spark that became Proper.
The solution: Proper is the first scalable, easy-to-integrate reconciliation and ledger solution for companies of all sizes. As a modern financial data platform, it’s tailor-made for fast-growing companies that deal with high volumes of transactions, from fintechs to marketplaces.
Proper’s ultimate vision is to provide the building blocks for all types of financial operations workflows available through easy-to-use APIs. The initial focus on reconciliation and ledgering translates payment transaction data across sources and networks, (e.g. payments providers, network files, bank partners, etc.) into unified formats that make it easy to analyze and manage. Companies using Proper can quickly authenticate transactions and ensure amounts line up between systems. When something doesn’t add up, Proper identifies which transactions were not properly accounted for and alerts the company. This is the holy grail for internal financial ops and product teams.
Proper also serves as a central repository for payments gathered from one or more sources, such as payment providers, banks, network files like NACHA, or in-house payment processing systems. Data can be sent to Proper via direct file upload, via the Proper Transactions API, or through cloud-based inputs. Once data is received, finance teams can apply financial operations tools for reconciliation, accounting, or compliance, and then push data to downstream destinations such as a data warehouse, core ERP accounting system, like Quickbooks, or structured customer reports for analysis or audits. Proper is unique in that it can meet companies where they are — either on day one or at scale.
Importantly, Travis and Kyle are exceptional builders and insightful leaders that bring with them years of experience in building and managing these systems at scale. They started Proper with the mission to increase the speed of innovation in fintech and improve the health of the financial services ecosystem.
Why did we invest: At Redpoint, we’ve seen firsthand how the exponential growth of fintech, and the proliferation of third-party infrastructure providers has led to unmanageably complicated payment stacks. One of our core theses in fintech infrastructure is the need for solutions like Proper that help fintechs avoid expensive mistakes and that support smooth operations at scale. Proper solves a major problem for companies offering payments on their platform and frees up fintech talent to concentrate on their core offerings and strengths.
During our due diligence every single company we spoke with confessed to struggling with reconciliation and unanimously said they would pay for a service that could help. The near universal demand for robust, flexible reconciliation services that we heard from the market was unmistakable.
While that was exciting feedback for us to hear, the true secret sauce of Proper is definitely the team. There are few founders as well equipped to tackle this particular problem better than Kyle and Travis. Not only have they worked on this problem, and at scale, at Marqeta, but they have also assembled an incredible team between Chris, King, Swapnil, and Joel. This is without a doubt the most experienced team that exists when it comes to this problem and we couldn’t be more excited to partner with them in this journey.
Read more about the news in Techcrunch here!