Because the world waits for $65 billion funds tech large Stripe to go public, a wave of smaller startups continues to roll into the market to select up extra funds enterprise. In one of many newest developments, Danish firm Flatpay, which builds fee options for small and medium bodily retailers like outlets, eating places and salons, has raised €45 million ($47 million) led by Daybreak Capital.
Flatpay had raised just below $21 million earlier than this newest Collection B, and with this new funding, it’s now valued at properly over $100 million. The corporate plans to make use of the cash to increase into new markets in Europe and to construct out extra merchandise alongside the point-of-sale and card terminals that it sells at present. A few of these merchandise may contain AI however solely as an enabler of sure options, fairly than a core service, stated Flatpay’s CEO Sander Janca-Jensen.
“We now have been in a position to elevate cash with out mentioning the AI buzz phrase,” he stated. “It appears to be uncommon nowadays.”
That €45 million is a robust Collection B within the present market in Europe, particularly when you think about the dimensions of the startup. Based in 2022, Flatpay presently has simply 7,000 prospects throughout Denmark, Finland and Germany.
Even with its revenues and buyer base each rising at a month-to-month charge of 15%, Flatpay’s enterprise is only a drop within the service provider ocean.
There are greater than 24 million SMBs in Europe; point-of-sale terminals within the area quantity greater than 17 million; and there will not be simply dozens however a whole lot of different funds providers — together with Stripe, Adyen, Sumup and PayPal, in addition to smaller gamers like SilkPay — all focusing on the identical prospects as Flatpay.
However traders assume there’s quite a lot of potential within the startup, sufficient to wager early and powerful, even within the present financial local weather.
Janca-Jensen, who co-founded the corporate with Rasmus Busk, Rasmus Hellmund Carlsen and Peter Lüth, stated the hole Flatpay noticed out there was an absence of actually easy options for retailers that need the comfort that expertise can deliver, with out the tougher features that come together with it, resembling troubleshooting, understanding the intricacies of fees, and integrating merchandise into their enterprise move.
The startup’s strategy to addressing that hole is available in 3 ways, he stated. On the shopper facet, Flatpay works with an outlined dimension of buyer: solely retailers that course of over €100,000 yearly, and the purchasers can’t be multiple-location chains or franchises. Janca-Jensen stated that it frequently rejects prospects in the event that they don’t meet these parameters.
On the expertise facet, it has matched its goal buyer dimension with the unit economics of its fee options to give you very fundamental, flat charges (therefore the startup’s title) of 0.99% for terminal transactions and 1.49% for POS purchases. Flatpay then doesn’t set a minimal cost for single transactions, and it doesn’t cost charges if prospects are paying with worldwide playing cards. Janca-Jensen admitted that its mannequin implies that Flatpay generally loses cash on transactions, however it general lowers the bar for utilization and encourages extra spend and general income for the corporate.
Maybe most curiously, on the gross sales facet, regardless of its concentrate on streamlined expertise, Flatpay solely sells by way of stay gross sales visits. No on-line gross sales (though there are specialists who will assist organize these in-person gross sales visits and deal with assist), no digital visits, and no plans to introduce both.
Janca-Jensen stated he and his co-founders developed a keenness for direct discipline gross sales once they had been promoting house alarm techniques in a earlier life.
As with funds {hardware} and software program, safety could be a exhausting promote to prospects. Flatpay discovered that the one manner it may reliably seal offers was by promoting in particular person. And the one manner that salespeople can promote in particular person is by understanding the merchandise rather well. “It’s important to get salespeople to grasp the product sufficient to elucidate it properly to patrons. It units excessive requirements for a way easy your product should be,” stated Janca-Jensen. “We like that problem.”
Round half of Flatpay’s 200 staff are on the gross sales facet, he stated, break up between those that assist organize gross sales visits and deal with assist; and those that go to prospects in particular person. Sometimes, they’re recruited from different retail roles fairly than software program gross sales.
“We avoid SaaS account executives and fintech folks,” he stated. In his opinion, SaaS gross sales are really easy that individuals who work in that space are “too lazy and complacent” to make the grade for discipline gross sales.
Thus far, within the three markets the place Flatpay operates, the intention has been to recruit very native salespeople who perceive the nuances of their respective markets. That appears to lift quite a lot of questions on how properly this may scale long run, however Janca-Jensen brushes that concern apart, and traders are equally bullish.
“The sphere gross sales mannequin, when accomplished properly, works. You’ll be able to localize and roll out groups in a cost-efficient approach to clarify on a neighborhood foundation why a product is smart,” stated Josh Bell, a normal companion at Daybreak who focuses on fintech.
He identified that iZettle — one other firm Daybreak backed — was additionally an early mover in utilizing discipline gross sales to promote its fancy new tech to non-technical prospects. “They had been a winner, however even they by no means did it in addition to Flatpay does this. Funds is large, and Flatplay has touched simply at a fraction of the chance.”
Denmark’s Seed Capital additionally participated on this spherical, together with different unnamed traders.
