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Modern Treasury, a financial technology company specializing in connecting businesses’ payment infrastructure to the internet, announced $ 38 million in new funding on Tuesday.
The tour was led by Altimeter Capital. No new assessment of the startup was disclosed.
Benchmark Capital and Y Combinator, which had supported previous funding rounds for Modern Treasury, also participated in the Series B, or second major funding round. Modern Treasury was part of Y Combinator’s startup incubator in the summer of 2018.
Modern Treasury is to some extent following in the footsteps of payment startup Stripe (Y Combinator class of 2009), whose basic offers are tools that allow online retailers to easily connect storefronts to credit card processors.
Instead of credit cards, however, Modern Treasury is creating software to help integrate direct banking services, including ACH, checks and wire transfers, with online services.
“Internet innovation is starting to hit these older segments of the economy,” says Dimitri Dadiomov, CEO and co-founder of Modern Treasury. These include business-to-business payments, payroll and benefits, student loan processing, rent collection, escrow of home sales, and health care payments.
These payment markets may present an even greater opportunity than credit cards. About $ 18.5 trillion B2B payments are made annually in the US, 88% of which are made by wire transfer, checks, and ACH payments. Credit card payments in the United States, by contrast, total about $ 4 trillion per year.
Traditional payment methods, especially checks, can sometimes mean a long wait for money to appear in a company’s vaults. Modern Treasury says it can help businesses eliminate this costly wait.
But that streamlining is hard work, as Dadiomov learned in a previous role overseeing banking integrations for online mortgage service LendinHome.
“An ACH is an ACH and a thread is a thread, but the way they code that, you have to build something different for each one,” says the CEO. After realizing that the same work was duplicated in many other companies, Dadiomov decided to found Modern Treasury to manage everything in one place.
Modern Treasury describes its current trajectory as “explosive growth”. The company exceeded $ 1 billion in total settled payments in 2020 and, according to Dadiomov, $ 100 million in monthly payments processed in August 2020. The coronavirus pandemic has accelerated digital transformation across the economy, including sectors like real estate.
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