Monite Doubles Seed Round to $10M to Enable B2B Platforms Add New Revenue Streams During the Venture Slowdown
- Fundraising News
- 21.03.2023 04:45 am
Monite, an API-first embedded finance workflows startup, has secured an aggregate $10M in Seed financing to help platforms working with SMBs capitalize on hassle-free B2B payments automation for their clients.
According to recent projections, the B2B payments market is expected to soar to $200 trillion by 2028. Unfortunately, many small and medium-sized businesses (SMBs) still rely on manual processing and use multiple tools to manage their payments, which often results in late invoices and lost revenue. An average SMB uses checks or cash close to 50% of the time and still receives almost 43% of its invoices past due. Without solutions available to capture all of a company’s industry-specific needs, SMBs are often forced to use five or more external tools to manage their payments. As of 2022, more than 40% of finance managers estimate that approximately 5% of their company’s revenue is lost each month to payment process inefficiencies. Monite offers a solution that addresses these pain points, providing businesses with tailored automation by integrating with the platforms that SMBs already use regularly.
Monite helps B2B platforms become a comprehensive solution for their clients by enabling the integration of customizable workflows that are specific to the industry they serve, including management of incoming or outgoing invoices and expense management. Workflows like invoicing or payables automation serve as the backbone of SMB operations, and they in turn form the basis for integrating additional financial products.
For those platforms that work with SMBs—SaaS providers, neobanks, and marketplaces—Monite’s finance workflows API creates new revenue streams for platforms because they are able to charge payment processing fees and additional SaaS income, in each case without investing the time and expense required to produce and operate such tools in-house, which can require 12 to 18 months and $3-5 million in upfront costs and millions of dollars to operate. Platforms can readily embed Monite's customizable workflows, including invoice and supplier management, into their existing interface, enabling them to establish new revenue channels by increasing SaaS pricing bundles and charging processing fees for payments on their platform. This results in a 2-5x increase in revenue per customer and stickier relationships for the platforms, while SMBs save time and reduce processing costs from an average of $6.50 to $1.45 per invoice, receive tailored automation of their costly routine, all within a platform that is already part of their workflow.
Monite recently closed $5 million in Seed funding in a round led by Third Prime, which was joined by S16, Audeo Ventures, and Long Run Capital. This investment follows a $5 million Seed led by Point72 Ventures in early 2022 and brings Monite's total Seed funding to $10 million. In addition to this seasoned group of FinTech investors, Monite is backed by esteemed industry leaders with extensive expertise and hands-on experience in FinTech and embedded finance, including Nium founder Prajit Nanu, Penta co-founder Igor Kuschnir, Klarna founder Victor Jacobsson, Mollie founder Adriaan Mol, ex-PayPal senior executive Phil Valka, and Plaid executive Jason Pate.
Ivan Maryasin, co-founder and CEO of Monite, said, “We are happy to be backed by thought leaders of the embedded finance space with huge expertise and hands-on experience in FinTech, who clearly understand the needs of the current market. Only 5-10% of SMBs use a modern finance stack, while 79% of them still do their accounts payable manually. SMBs remain technically underserved, while B2B neobanks, eCommerce and B2B SaaS businesses have an incredible opportunity here to grow their revenue with no additional marketing expenses. Digitalizing finance workflows through existing SaaS players is a game-changer, and we allow our clients to become an all-in-one financial OS for their industry."
Mike Kim, Partner at Third Prime, added, “From a demand perspective, there’s a real gap for Monite to fill. Monite's innovative approach to B2B payments automation through better contextual distribution has the potential to revolutionize a market that has been historically resistant to innovation by streamlining payment processes and eliminating the headaches of manual processing. By providing a tailored and efficient solution through its API-first finance workflows, Monite has the power to unlock an enormous opportunity for the B2B sector, both for SMBs and the platforms serving them, in a repeatable and durable way.”
Currently, Monite has ten clients in Europe and the US and plans to close more deals in the next few months. Its new funding will be used to develop new product features, cover more payment and financial services integrations, and expand its reach in the growing B2B payments market.