GoCardless Receives $22.5 Million in Funding for Global Direct Debit

Fintech startup GoCardless that wants to make it easier for businesses to collect payments from clients, has been able to raise funding of $22.5 million from its existing investors that include Accel Partners, Balderton Capital, Passion Capital and Notion Capital.

Founded in 2011 in London, GoCardless has a goal of creating a worldwide bank-to-bank network which makes collecting monies through direct debit as automated and smooth as possible.

Subscriptions have become a popular monetization model during the Internet era, in services that are consumer focused such as Spotify, while SaaS companies that are enterprise focused such as Salesforce are proving to be popular amongst millions.

Estimates suggest 35% of the companies in the Fortune 2000 produce revenues through subscriptions, and managing the payments is where businesses like GoCardless enter.

Other businesses operating in this recurring payments arena included Recurly, based in San Francisco which has a substantial backing from venture capital, and Stripe, which caters as well to businesses that are subscription based.

One of the issues that many of the companies are pushing to fix is the cross-border transactions. Anyone today is able to have a global business via Internet, making the need for a global solution for collecting funds from customers more important than ever before.

However, many existing providers of direct debit were not made thinking of global commerce, which is why startup GoCardless is creating what it refers to as “new international payments network,” which would work irrespective of the country or the currency.

GoCardless currently is limited to just businesses in a few countries across Europe, with support for UK pounds, euros and the Swedish krona.

However, it is seeking to extend its horizons. It claims it currently processes £3 billion or $4 billion in transactions for more than 30,000 organizations across Europe including in the United Kingdom, Germany, France, Spain and Sweden.

It currently is accepting interest registrations from companies in the United States, Brazil, Canada as well as New Zealand. GoCardless expects that Australia will be the first launch of a non-European country.

Hiroki Takeuchi the co-founder and CEO of GoCardless said that as more businesses start international sales, they will face endless amounts of frustrations managing payments in multiple nations, and what the company has engineered is how to plug in recurring payments to their own systems around the world so they are able to focus on other important challenges in their businesses.

Leave a Reply

Your email address will not be published. Required fields are marked *