Israeli fintech startup Melio, the developer of a digital payment platform focused on US small and medium businesses, raised $110 million in funding, the company announced on Monday, sending its valuation soaring to $1.335 billion.
Melio had secured $144 million in funding a few months ago with backers such as Aleph, Bessemer Venture Partners, Salesforce, and American Express Ventures.
The latest funding round was led by private NY-based hedge fund Coatue. Investors from previous rounds include Accel, Aleph, Bessemer Venture Partners, Corner Ventures, General Catalyst, Latitude, and LocalGlobe.
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, launched in 2019, 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 says it is tapping into a massive B2B payment industry in the US where 40 percent of transactions – a $25 trillion market – still involve paper checks and payments to suppliers involve paper invoices, long payment cycles, and cumbersome processes. The startup says it has experienced rapid growth, as the COVID-19 pandemic has forced an accelerated adoption of digital solutions.
“Getting better control over cash flow and the ability to manage payments remotely, especially in a socially distant world, are key elements of a business’ health, and that process shouldn’t be complicated,” said Bar, a former PayPal executive who serves as Melio CEO.
“We see this fundraising as a great privilege and responsibility to support small businesses during these challenging times,” he added.
“Melio has identified both the opportunity and duty to help small businesses manage their finance remotely and improve cash flow, in normal times as well as during this crisis, as physical payments supply chains are interrupted and overwhelmed. Going digital is the only way small businesses can compete against larger rivals and stay ahead of the curve” commented Michael Gilroy, General Partner at Coatue.
Melio is headquartered in New York and employs over 100 people.