Commercial payment fintech investments pass $1 billion mark

In the midst of a pandemic, venture capital investors around the globe are pouring funds into non-bank payment institutions in anticipation of benefiting from growth in the commercial payments segment. This week, Melio and Neon Pagamentos raised $144 million and $300 million respectively, bringing the total VC inflows this year to $1.18 billion.

Melio, which is a New York-based B2B payments company, provides tools to small and medium-sized businesses to manage suppliers’ payments and minimise time and cost.

The investors who have led fundraising for the company include Accel, Aleph, Bessemer Venture Partners, Coatue Management and General Catalyst, with participation from LocalGlobe, Corner Ventures and American Express Ventures.

According to the press release, this funding would allow the company to expand to more clients and it also intends to support the company’s plan to provide B2B payments capabilities to third parties. The company recently had partnered with Intuit Quickbooks to provide bill payments capabilities inside QuickBooks.

Another Brazilian based payments company, Neon Pagamentos, received $300 million in series C funding. The company raised money from General Atlantic, BlackRock, Vulcan Capital, PayPal Ventures, and Endeavor Catalyst, in addition to former investors Monashees and Flourish Ventures. The investment will be available in two $150 million tranches.

The funds raised will be used towards the company’s user base of consumer and business clients and also enhance the technology capabilities. Previously, the company had raised $22 million in series A funding and $92 million in series B.

This year, fintechs have collectively raised more than $736 million (excluding this funding) and the last fintech to raise funding was Routable, which raised $12 million in August.