Payments firm Modulr raises £19m for expansion
Myles Stephenson: a year of strong growth
Business payments company Modulr has secured £18.9 million in growth funding to develop its produce and service offering and expand into new markets.
The funding round was led by growth capital firm Highland Europe with participation from existing investors including Frog Capital and Blenheim Chalcot. It takes the total sum raised to £53.3 million.
The fintech business, which has been building a significant presence in Edinburgh, has also opened its first non-UK office in Dublin.
The firm operates as a digital payments alternative in the wholesale and transaction payments market and specifically aims to disrupt the $2.7tn incurred through administrative costs – 80% of which is paid by small businesses, which rely on incumbent banking infrastructure.
In less than four years, the business has scaled to process more than £25 billion worth of payments through its partner clients including Sage, Liberis, Salary Finance and Iwoca. It counts digital bank Revolut as one of its largest customers.
Myles Stephenson, chief executive, said: “In the past year, we’ve experienced strong growth, we’ve gained direct access to key payments infrastructure and have positioned ourselves as a trusted payments partner for some of the most ambitious companies in the UK and beyond.
“With Highland Europe, we have a partner which can help to further fuel this momentum, investing in our infrastructure and product suite to ensure we can provide our customers with a reliable service that’s easy to access and simple to use. This is important, particularly in the face of this tougher business landscape.”
Last year, Modulr became one of only a few non-banks to gain direct access to Faster Payments and Bacs, the two main UK bank payments schemes. The fintech is also a “principal” issuing member of Visa.
“We see ourselves as the plumbing layer behind the scenes — delivering the payments infrastructure that enables other businesses to automate payment flows and reconciliation, embed payment flows within their platform and build entirely new payment services for their customers,” adds Stephenson.
Laurence Garrett at Highland Europe said: “No-one can deny the opportunity of the business payments market, some five times the size of the opportunity presented by consumer payments.”
Several reports in the last few weeks have suggested that fintech funding has fallen sharply in the last few months, with CB Insights describing Q1 2020 as “the worst Q1 since 2016”.
Despite this, deal flow continues and has been secured by companies such as Countingup, N26 and Onfido.