Finance

Blackstone backs Stripe rival with €665m fundraise

Dutch payments startup Mollie has secured a €665m capital boost in one of the largest fintech funding rounds in Europe this year.

The series C round, which values Mollie at €5.4bn, marks a significant increase on its previous raise of €90m a year ago.

It elevates Mollie to the ranks of European giants Klarna and Checkout.com, which raised $1bn and $450m respectively earlier this year.

The investment was led by funds managed by US asset management giant Blackstone as part of its growth equity investing business, while other backers included Revolut investor TCV, EQT Growth, General Atlantic, HMI Capital and Alkeon Capital.

Mollie is one of Europe’s largest payments service providers, tackling the small business market to rival the likes of Stripe, Adyen and PayPal. The startup said the funding will be used to fuel international expansion in the UK and across Europe, increasing the size of its team and investment in product and engineering.

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The startup recently hired former Worldpay executive Shane Happach as its chief executive, who took over the reins in April. Happach told Financial News in a 21 June interview that the 788% jump in the amount of capital injected compared to its previous funding round was the result of Mollie seeing “so much opportunity” in the growth of e-commerce.

“For Blackstone and certain other tier-one investors, they prefer to make more sizable bets. After the success of our B round, we saw the ability to invest heavily in the business,” Happach said.

“If we do a big fundraise now, then we can really focus our attention on the growth plan and not have to go through a cycle of raising frequent capital. And to be honest, the market has seen a lot of people in our space raising big rounds, and we want to make sure that our customers perceive that we’re willing to invest similar amounts [in our business].”

Amsterdam, where Mollie is based, has been a hotbed for financial innovation in recent years, highlighted by the €12.7bn IPO of Adyen in 2018.

In the wake of the 2016 Brexit vote and the end of the passporting regime, several UK fintech firms sought out the Netherlands capital as a base for catering to the continent due to the two nations’ regulatory similarities. The Dutch Authority for Financial Markets and the UK’s Financial Conduct Authority signed a formal agreement to work more closely together in 2019.

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Data from CB Insights shows Mollie is one of Europe’s top five most valuable private fintechs, and one of the world’s top 20.

Happach said the startup is in no hurry to raise capital again any time soon, nor does it intend to splash the cash on marketing or acquisitions. But after being profitable for most of its history, this could be the first year Mollie seeks to reinvest some of its cash back into developing the product.

“I know I’d be drawn and quartered if I could spend that sum of money in the space of a year,” he said. “The thesis is not an M&A thesis. It’s really an organic build thesis, the balance sheet will help us as we expand our product capabilities.”

Mollie plans to increase hiring by 300 new employees in the next six to nine months, which Happach said would include more than doubling its team based in London’s King’s Cross. The startup is currently in soft launch in the UK, only serving clients that trade in continental Europe. A fully native UK solution is on the cards for 2022.

Happach was present as Worldpay went from 1,000 employees in 2010 to 55,000 this year. In 2015, the payments group launched one of London’s largest tech-focused initial public offerings at the time, before being acquired by Vantiv in 2018 and FIS a year later.

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London is set to face its first major fintech listing later this year in the form of cross-border payments business Wise, which will seek a dual-class share structure. Other fintech firms have also suggested they may choose the City for a float, including Klarna and Revolut.

“I’ve seen lots of different activity over the years and I’m really comfortable in helping companies grow and build great teams,” Happach said. “I’d like to think [the IPO experience] is not the only reason that people were interested in bringing me onto the job, but the fact that I’ve done it before and I’m comfortable in the investor space certainly helps.”

To contact the author of this story with feedback or news, email Emily Nicolle

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