Originally published on PYMNTS.com
Funding can often be a sign of confirmation for FinTech startups. For Modo, the company’s Series A round showed that there is an appetite for companies that give banks or large retailers the opportunity to compete on the basis of who they are and not necessarily give up part of their business models, according to Modo Chief Revenue Officer Brian Billingsley. To help further its mission, the Texas-based FinTech startup recently notched $13 million in Series A financing to bring its total amount of funding to more than $16 million. Investors who participated in the round include Deutsche Bank in addition to other angel and strategic investors, according to the company.
With its latest round, Billingsley said that the funding will be used for growth and the work that the startup is doing with Deutsche Bank as well as other global institutions. The rest of the funds will go toward funding the company’s vision not just to help banks, processors and merchants, but to create solutions geared directly to merchants as well. Billingsley noted in an interview with PYMNTS.com that the company has found that its interoperability story can resonate with merchants as “large retailers are finding that to optimize payments there isn’t one solution that can rule them all.”
Merchants that have volumes ranging from several hundred million to several billion, Billingsley said, might have three or four and up to 10 or 12 processing relationships without even talking about alternative payment methods. These companies, he said, are at a point in their lifecycles where they are looking to optimize acceptances and decrease declines. They are also going local and negotiating directly with payment players. The problem is that each of these processors has a different portal — in essence, each one does the same thing a different way. And, once one considers alternate payment methods, “you start looking at the spaghetti that these merchants have to deal with,” Billingsley said.
To make this process easier with interoperability, Billingsley said Modo will give companies access to the payment services marketplace through one connection. That is, the FinTech startup can simplify operations at the back end of the business from reporting to reconciliation and settlement as well as adding different APMs. “It’s really helping these merchants who have already started to optimize their payment stack take it [to] the next step,” Billingsley said. In all, the company is still working with large global banks that are looking to pay out with digital wallets, but it also sees a market in merchants that are big enough that they are focusing on several regions and are looking to optimize their payments as well.