As many companies become remote-first organizations, Routefusion is out to make it easier for them to pay their employees in other countries.
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Co-founders Colton Seal and Richard Scappaticci initially set out to start a neobank. After seeing some of the pain points customers were having moving money to other countries, they shifted to integration with payment providers, but found that also to be complex.
“We started thinking, why not have a one-stop shop,” Seal told Crunchbase News. “To build something, you have to integrate with eight to 10 providers, and that is still not 100 percent because you have to still integrate with others. The bigger opportunity became integrating with providers and developing a single API to focus on building a developer-first product for cross-border payments.”
Austin-based Routefusion, founded in 2019, enables software engineers to develop against its application programming interface (API) to embed cross-border payments for customers in as quickly as two days. Customers have access to more than seven different banking and forex providers.
The fintech company recently secured its first institutional funding of $3.6 million in seed financing, led by Silverton Partners, with participation from Initialized Capital, NextWorld Capital and William Hockey.
This capital raised will enable Routefusion to build out its product and operations teams, expand internationally with banking partners, and further develop its self-serve product, Seal said.
The number of payments facilitated by the company has increased month over month, and it ended 2020 with nearly $40 million in transactions from its client roster, which includes Rippling, one of its first customers, he added.
As part of its investment, Roger Chen, partner at Silverton, will join Routefusion’s board of directors, while Andrew Lee, partner at Initialized Capital, and Craig Hanson, general partner at NextWorld Capital, will hold board observer seats.
Lee said in an interview that he learned about Routefusion from a relationship with Rippling. Rather than have a middleman taking fees off of the transaction, the company is modeling it after consumers sending cash to a friend through a cash app, where no fees are involved.
“Routefusion is working on an interesting problem that historically was ignored,” he said. “Cross-border is not so sexy, but if you have workers in another country, you have to deal with a ton of middlemen and it is very complex.”
Meanwhile, Seal sees the payments-as-a-service market as “part of the greater fintech vision.” Indeed, the global market is predicted to reach $25.7 billion by 2027, according to market research and consulting company Grand View Research, and investors are interested as well:
- Payments platform Rapyd recently raised $300 million in Series D financing led by Coatue.
- Melio, a fintech company that digitally manages business-to-business payments and receivables, raised $110 million in Series C2 funding, also led by Coatue.
“We want to become the default provider for neobanks and international payroll companies,” Seal said. “We see a future in which, especially in North America where the backbone is community banks, the neobank will become the new community bank and serve communities that expand the globe, and payroll will transcend across borders.”
Illustration: Dom Guzman