Modulr, a UK-based Payments-as-a-Service (PaaS) provider, has landed an undisclosed strategic investment from FIS Ventures, the venture capital (VC) arm of major US financial services firm FIS.
It arrives just five months after Modulr secured a £9 million investment from PayPal’s venture arm, and less than a year after its May funding round, which raised £18.9 million.
The start-up powers payments infrastructure for fintechs including Revolut, Iwoca, Sage and Mode. It is currently investing on a period of growth.
Regulated in the UK and Ireland, Modulr is focusing on the business-to-business (B2B) payments digitisation opportunity across Europe.
FIS will, as part of its investment, leverage Modulr’s payment infrastructure across both the UK and wider Europe.
A year of growth
Modulr describes 2020 as its “breakout year”, signing up a number of “enterprise clients” – the names of which have not been disclosed.
Recent, smaller customer signings include Finndon, and Fortu.
Lanistar, which was issued a warning by the Financial Conduct Authority back in November, claimed to use Modulr’s services. However, Modulr soon issued a statement that Lanistar has “no right” to use its name until the latter had passed due diligence with both the provider and the FCA.
As a direct Bacs and Faster Payments scheme member, Modulr can settle and hold funds at the Bank of England. The start-up is one of just a few non-bank firms to gain access to both major UK payments schemes.
The start-up has also spun up a variety of new products in the last year. These include services around payment initiation and confirmation of payee.
It also secure an electronic money license (EMI) issued by the Central Bank of Ireland. This was in an effort to protect its European expansion plans should Brexit invalidate its UK licence across the wider continent.
Total funding raised to date – excluding FIS Venture’s capital injection – comes to £63.3 million. This includes a £10 million grant from the Capability and Innovation Fund.
A cheaper alternative
“Modulr lowers the barriers to bringing payments into a platform,” the start-up’s CEO, Myles Stephenson, explained back in November.
Stephenson thinks “the opportunity for a digital alternative to commercial and wholesale transaction banking is significant”.
The fintech essentially automates payment flows and embeds payments within customers platforms.
Modulr focuses on serving software firms, merchants, and specialist banks – which will continue to be its focus across Europe.
“We plan to build a truly digital, frictionless payments infrastructure for software platform partners to provide new payment experiences to more than 500 million people,” Stephenson said back in October.
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