Melio, an Israeli startup that developed a payment platform focused on small businesses in the US, emerged from stealth mode on Tuesday and announced that it raised $144 million in funding in recent months. Melio has investor backing from firms Aleph, American Express Ventures, and Bessemer Venture Partners
Founded in 2018 by entrepreneurs Matan Bar, Ilan Attias, and Ziv Paz, Melio offers easy account payables services, simplifying the paperwork process for small businesses, and allowing them to pay vendors with credit or debit cards. Using the Melio platform, clients add invoice details for a vendor manually and they can then manage and schedule payments using their method of choice.
The service is offered free with a 2.9 percent fee for credit card payment. The platform also integrates with Quickbook, a popular accounting software package.
Melio is headquartered in New York and employs over 100 people.
“Business payments shouldn’t be more complicated than paying a friend with your phone,” said Bar, Melio’s CEO, in a statement cited by Bloomberg. Bar is a second-time entrepreneur, having previously set up a startup called The Gifts Project, which was subsequently sold to eBay in 2011.
Bar told Haaretz that the payment services industry in growing rapidly around the world, citing Bit and Pepper Pay in Israel, and Venmo, owned by PayPal abroad.
“However, when a small business needs to pay a supplier, it has to go to its back office, which then sends off a cheque, by mail, to the supplier. In the US, the annual scope of these types of transactions is between $14 and $17 trillion dollars. That makes no sense since the same person will send money to a friend using a digital service,” he said
Bar said on Tuesday that Melio, set up just two years ago, experienced exponential growth during the pandemic as more businesses moved online. “This coronavirus period is awful for many people. We have clients who’ve closed their businesses, including retail stores and restaurants,” he told Haaretz. “Despite this, because of the rapid switch of businesses to online mode, we experienced a 700 percent growth between March and now.”
In 2019, Melio took part in the Google Startup Growth Lab in Tel Aviv.