Payments platform GoCardless raises $7m
Balderton Capital-led backing will fund new R&D hires
A start-up that claims to offer businesses a hassle-free way of dealing with Direct Debit payments has raised $7m in a major funding round led by tech-focused venture capital firm Balderton Capital.
Founded in 2011 by former financial consultants Tom Blomfield, Matt Robinson and Hiroki Takeuchi, GoCardless claims to remove barriers to entry for businesses setting up recurring Direct Debit payments – users can set up debits directly from their website, without the need to collect and store paper mandates.
In exchange, the RBS-sponsored firm takes a 1% commission on transactions, up to a maximum of £2 per payment.
Since launch the FCA-authorised company has grown rapidly and now claims to be the UK’s largest Direct Debit provider, processing more than $200m of transactions per year having grown by 700% in 2013.
The $7m funding, which was led by Balderton Capital with input from existing investors Accel Partners and Passion Capital, will be used to expand the company’s engineering team and develop its proposition targeted at larger businesses.
Hiroki Takeuchi, co-founder and CEO of GoCardless, commented on the deal: “We believe that payments should be one less barrier to business. Direct Debit is perfect for accepting recurring payments, but it’s been out of reach to most companies up until now.
“Our largest customer today is 15 times bigger than that of a year ago. This new funding allows us to recruit the best talent to help us scale our technology to serve the demands of ever larger businesses.”
Tim Bunting, general partner at Balderton Capital, will join the board as part of the deal, alongside Sven Schmidt from Accel Partners. Bunting said: “GoCardless is an exceptional team with the potential to radically improve the way payments are done for businesses. For us, the most distinguishing feature was the feedback from their existing customers, who stressed that the technology they have developed, and the technical team they have built, is world class.
“We believe this technological advantage, the scalability of the GoCardless model and size of the market it operates in will allow GoCardless to play an important role in the future of online payments.”