The Israeli fintech company Melio announced today (Monday) the raising of $110 million in Round B rocketing to a $1.3 billion valuation within a year and a half since they launched in May 2019. The company has grown by 2,000% in one year.
Melio provides a single, integrated tool that allows small businesses to transfer and receive payments in a faster, easier way; giving oversight and control over cash flow, reducing or eliminating late payment costs, and giving businesses back valuable time.
Since Melio’s monthly active users grew by over 2,000% due to coronavirus lockdowns, small businesses are increasingly adopting digital solutions for payments.
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Melio has raised $256 million to date, $240 million of which it has raised in the past year. In the previous round in September 2020, the company was worth $700 million.
The current round was led by Coatue Management, which has previously invested in the company as well as in a number of other large companies in Israel, such as Rapid and Gong.
Other investors in the round include Accel, Aleph, Bessemer Venture Partners, Corner Ventures, General Catalyst, Latitude, and LocalGlobe. Salesforce and American Express Ventures also invested in 2020.
Melio was founded by CEO Matan Bar, CTO Ilan Atias, and COO Ziv Paz. The three are experienced entrepreneurs. CEO Matan Bar sold his first startup The Gifts Project, to eBay and managed an international P2P payment team at PayPal.
COO Ziv Paz served as VP of the FIMI fund, which specializes in acquiring and improving companies. CTO Ilan Atias worked at PrimeSense, which developed sensors for detecting body movements. The company was sold to Apple. He also held a management positions at Outbrain and Windward.
Surprisingly, B2B wholesale payments industry is still involving paper invoices, long payment cycles, and generally inefficient processes. Over 40% of those transactions a $25 trillion market, in the US are still made with paper checks.
Melio has built a technological infrastructure that connects to various financial entities, including the development of algorithms that protect the system from fraud. “We built AWS (Amazon Cloud Service) from banks instead of servers,” Ilan Atias, co-founder and VP of technology told Calcalist.
Melio currently employs 200 people will use the funds to expand its workforce. The company will add 300 new employees. In addition, the funds will be used to continue marketing and sales efforts in the United States.
“Getting better control over cash flow and the ability to manage payments remotely –and small business digitization is here to stay– are key elements of a business’ health, and that process shouldn’t be complicated,” said Melio CEO and co-founder Matan Bar, “We see this fundraising as a great privilege and responsibility to support small businesses during these challenging times.”