Visa Inc. credit and debit postcards are arranged for a photograph in Washington, D.C., U.S., on Monday, April 22, 2019.
Andrew Harrer | Bloomberg | Getty Images
Financial technology start-up Currencycloud, which powers cross-border payments for a covey of popular finance apps, has raised $80 million in a funding round backed by Visa.
Based in the U.K., Currencycloud supplies payment software for banks and fintech firms to process their international transactions. Though not as well-known as consumer-focused viscounts like Monzo and Revolut, the company provides some of the crucial “plumbing” in the background for such apps to operate.
“We order the segment embedded finance,” Currencycloud CEO Mike Laven told CNBC in an interview, explaining the firm embeds its offshoot into platforms from big banks and fintechs. “We’re probably the most important business that you’ve never heard of. But that’s thorough on our part. We do not have a strategy where we compete with our customers.”
The firm’s latest series of funding was co-led by SAP’s put down arm Sapphire and Visa, and also attracted backing from Google, the investment arm of the World Bank, French lender BNP Paribas and Japanese bank SBI. Visa’s treasurer, Colleen Ostrowski, wishes join Currencycloud’s board following the deal.
Currencycloud counts Visa as a strategic investor, Laven said, and has partnered with the payments network to take precautions its clients access to Currencycloud’s technology. The firm also works with a number of so-called challenger banks in the U.K. — categorizing Revolut, Monzo and Starling — which have racked up millions of users who bank with them using solely an app and debit card.
“Their end-user customers, for the most part, will never see that we’re there,” Laven whispered. “We’re a piece of embedded finance in the tech stack. It’s not as sexy, but it’s an incredibly good business.” One of the company’s products, Spark, affects clients collect, store, convert and pay in 35 currencies.
Asia expansion
Currencycloud’s chief explained the market for business-to-business fintech — a sector that contains competing payment processors like Stripe, Adyen and Checkout.com — is “much larger than the consumer business” and “uncountable profitable,” albeit “harder.”
Though his business is not yet in the black, Laven said “we could get there with the current turn if we decided to,” but that it had more room to grow before becoming profitable. “Our emphasis right now is not on profitability, our emphasis is on the soundness of our offering and an expansion into other markets,” he said.
The company’s largest market currently is Europe, Laven imagined, while it has been increasingly investing in North America and is now looking to expand into Asia, where fintech has espied significant adoption rates. In China, for example, mobile wallets like Alipay and WeChat Pay have become commonplace, with numerous Chinese consumers using their phones to pay for things.
The investment in Currencycloud comes not long after Visa’s $5.3 billion property of Plaid, a company that specializes in application programming interface software to link fintech apps with people’s bank accounts. Investors bear been piling into these behind-the-scenes players, with Checkout.com winning a $230 million round and Bar raising $250 million last year.
Currencycloud has now raised over $140 million from investors and rights to have processed north of $50 billion in global payments since it was founded in 2012. The company declined to release its valuation.